CORAZON MINING LIMITED — Annual Report 2019

Sep 19, 2019

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AND ITS CONTROLLED ENTITIES (ABN 87 112 898 825)

ANNUAL REPORT for the financial year ended 30 June 2019

Annual Financial Report

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CONTENTS

CONTENTS	CONTENTS
Corporate Directory ............................................................................................................................................................... 1
Chairman’s Letter................................................................................................................................................................... 2
Directors' Report .................................................................................................................................................................... 3
1.	Directors ................................................................................................................................................................... 3
2.	Company Secretary ................................................................................................................................................... 3
3.	Operating Results ..................................................................................................................................................... 3
4.	Principal Activities and Significant Changes in Nature of Activities .......................................................................... 3
5.	Dividends Paid or Recommended ............................................................................................................................. 3
6.	Likely Developments and Expected Results of Operations ....................................................................................... 3
7.	Review of Operations ............................................................................................................................................... 4
8.	Discussion and Analysis of Operations and the Financial Position ......................................................................... 11
9.	Significant Changes in State of Affairs .................................................................................................................... 13
10.	After Reporting Date Events ................................................................................................................................... 13
11.	Future Developments, Prospects and Business Strategies ..................................................................................... 13
12.	Environmental Issues .............................................................................................................................................. 13
13.	Information on Directors ........................................................................................................................................ 14
14.	Remuneration Report (audited) ............................................................................................................................. 16
15.	Meetings of Directors ............................................................................................................................................. 21
16.	Indemnifying Officers ............................................................................................................................................. 21
17.	Indemnity and Insurance of Auditor ....................................................................................................................... 21
18.	Options ................................................................................................................................................................... 21
19.	Proceedings on Behalf of Company ........................................................................................................................ 22
20.	Non-Audit Services ................................................................................................................................................. 22
21.	Officers of the Company who are Former Partners of PKF Perth ........................................................................... 22
22.	Auditor’s Independence Declaration ...................................................................................................................... 22
Auditor’s Independence Declaration ................................................................................................................................... 23
Consolidated Statement of Profit or Loss and Other Comprehensive Income .................................................................... 24
Consolidated Statement of Financial Position ..................................................................................................................... 25
Consolidated Statement of Changes In Equity ..................................................................................................................... 26
Consolidated Statement of Cashflows ................................................................................................................................. 27
Notes	to the Financial Statements ....................................................................................................................................... 28
1.	Statement of Significant Accounting Policies .......................................................................................................... 28
2.	Other Revenue ........................................................................................................................................................ 41
3.	Expenses ................................................................................................................................................................. 41
4.	Income Tax Expense ............................................................................................................................................... 42
5.	Profit/(Loss) Per Share ............................................................................................................................................ 43
6.	Cash and Cash Equivalents ..................................................................................................................................... 43
7.	Trade and Other Receivables .................................................................................................................................. 43
8.	Other Assets ........................................................................................................................................................... 44

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9.	Financial Assets ....................................................................................................................................................... 44
10.	Controlled Entities .................................................................................................................................................. 44
11.	Intangible Asset ...................................................................................................................................................... 45
12.	Plant and Equipment .............................................................................................................................................. 45
13.	Exploration and Evaluation Expenditure ................................................................................................................ 46
14.	Trade and Other Payables....................................................................................................................................... 47
15.	Provisions ................................................................................................................................................................ 47
16.	Issued Capital .......................................................................................................................................................... 47
17.	Reserves .................................................................................................................................................................. 48
18.	Capital Commitments ............................................................................................................................................. 49
19.	Operating Segments ............................................................................................................................................... 50
20.	Share Based Payments ............................................................................................................................................ 52
21.	Cash Flow Information ............................................................................................................................................ 53
22.	Key Management Personnel Compensation........................................................................................................... 53
23.	Auditors’ Remuneration ......................................................................................................................................... 54
24.	Financial Risk Management .................................................................................................................................... 54
25.	Related Party Disclosures ....................................................................................................................................... 58
26.	Contingent Assets and Liabilities ............................................................................................................................ 58
27.	Events after the Reporting Date ............................................................................................................................. 58
28.	Dividends ................................................................................................................................................................ 59
29.	Significant Non Cash Transactions .......................................................................................................................... 59
30.	Parent Entity Disclosures ........................................................................................................................................ 59
31.	Company Details ..................................................................................................................................................... 60
Directors’ Declaration .......................................................................................................................................................... 61
Independent Auditor’s Report ............................................................................................................................................. 62
Additional Information For Listed Companies ..................................................................................................................... 67
Corporate Governance......................................................................................................................................................... 74

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CORPORATE DIRECTORY

NON-EXECUTIVE CHAIRMAN

Terry Streeter

EXECUTIVE MANAGING DIRECTOR

Brett Smith

NON-EXECUTIVE DIRECTORS

Clive Jones Jonathan Downes Mark Qui

COMPANY SECRETARY Robert Orr

PRINCIPAL & REGISTERED OFFICE

Level 2, 38 Richardson Street West Perth, Western Australia, 6008 Telephone: (08) 6142 6366

AUDITORS

PKF Perth Level 5, 35 Havelock Street WEST PERTH WA 6005 Telephone: (08) 9322 2798

SHARE REGISTER

Advanced Share Registry Services 2/150 Stirling Highway NEDLANDS WA 6009 Telephone: (08) 9389 8033

SECURITIES EXCHANGE LISTINGS

Australian Securities Exchange (Home Exchange: Perth, Western Australia) Code: CZN

BANKERS

National Australia Bank Limited 50 St Georges Terrace PERTH WA 6000

WEBSITE

www.corazon.com.au

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CHAIRMAN’S LETTER

Dear Shareholders,

It is my pleasure to present you with Corazon Mining Limited’s Annual Report for the year ending 30 June 2019. I am pleased to have recently joined Corazon’s team who have worked productively towards advancing two quality projects with the potential to supply strategic metals to what is forecast to be a major growth sector - the rechargeable battery industry.

The Company’s continued focus on the Lynn Lake Mining Centre in Canada and the Mt Gilmore CobaltCopper-Gold Project in N.S.W. is undertaken with a view towards advancing the development potential of Lynn Lake, and to exploring the copper-cobalt potential at Mt Gilmore.

Given the recent renewed interest in nickel and its role as a key commodity in the burgeoning battery sector, the Company will give its key attention to its flagship nickel sulphide asset - Lynn Lake.

The underlying price of nickel is driven by the increasing demand for electric vehicles and a likely supply deficit, enhanced by Indonesia’s recent ban on exports. The nickel price has risen by ~65% since the start of 2019, hitting $18,000 a tonne, its highest level since September 2014. Goldman Sachs has raised its 12-month price outlook from $16,000 to $22,000 per tonne on the back of these supply-side issues.

Lynn Lake is a historically significant mining centre with large JORC compliant resources and good local infrastructure. Corazon now controls the entire Lynn Lake nickel camp, having consolidated the holdings in the area in recent times. The project’s nickel-copper-cobalt sulphide deposits were mined continuously between 1954 and 1976, processing over 20 million tonnes. Substantial resources remain and further extensive drill defined mineralisation and other targets also exist within the mining centre.

With little modern exploration undertaken to date in the mining centre, Corazon’s opportunity for discovery at Lynn Lake is substantial.

As part of Corazon’s process of defining Lynn Lake’s development potential, new quality resource estimations have been completed and modern metallurgical testwork has delivered a major technical breakthrough, producing separate high-value and high-purity nickel and copper concentrates. This work will enable the determination of value for Lynn Lake at a time when there is a strong expectation of increased demand for metals.

In Australia, Corazon advanced the extensive and highly prospective Mt Gilmore project, with the Company’s exploration of the prospective +20 kilometre “Mt Gilmore trend” uncovering a major copper-cobalt-silver-gold geochemical trend, representing a district-scale exploration play for large intrusive-related copper-cobalt-gold deposits.

The Company’s exploration results continue to underpin the belief that Mt Gilmore is prospective for hosting multiple copper and cobalt dominant sulphide deposits.

Corazon’s continued focus on exploration at both Lynn Lake and Mt Gilmore is providing strong exploration opportunities and the potential to deliver significant value-appreciation for shareholders. On behalf of Corazon’s Board and team, I thank you for your continued support of our work.

Sincerely,

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Terry Streeter Chairman

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DIRECTORS' REPORT

The Directors present their report, together with the financial statements, on the Consolidated Entity (referred to hereafter as the ‘Consolidated Entity’) consisting of Corazon Mining Limited (referred to hereafter as the ‘Company’ or ‘Parent Entity’) and the entities it controlled at the end of the financial year ended 30 June 2019.

1. Directors

The names of Directors in office at any time during or since the end of the year are:

Terry Streeter Non-Executive Chairman Brett Smith Executive Managing Director Clive Jones Non-Executive Director Jonathan Downes Non-Executive Director Mark Qiu Non-Executive Director

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

2. Company Secretary

Mr Robert Orr, CA holds the position of Company Secretary. Mr Orr is a Chartered Accountant who has acted as Chief Financial Officer and Company Secretary for a number of ASX listed companies. He has over 20 years’ experience in public practice and commerce, during which he has worked extensively in the resource industry and has experience in capital markets, project development, contract negotiation and mining operations.

3. Operating Results

The consolidated loss of the Consolidated Entity after providing for income tax and eliminating intercompany interests amounted to $2,352,622 (2018: $2,065,987)

4. Principal Activities and Significant Changes in Nature of Activities

The principal activity of the Consolidated Entity during the financial year has been exploration for nickel, cobalt, copper and gold and development of mining activities. There were no significant changes in the nature of the Consolidated Entity’s principal activities during the financial year.

5. Dividends Paid or Recommended

The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the date of this report.

6. Likely Developments and Expected Results of Operations

The Consolidated Entity intends to continue its exploration, development and production activities on its existing projects and to acquire further suitable projects for exploration as opportunities arise.

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DIRECTOR’S REPORT (cont)

7. Review of Operations

Corazon Mining Limited (ASX: CZN) ( Company or Corazon ) is an Australia-based company exploring and developing the Lynn Lake Nickel-Copper-Cobalt Sulphide Project in Canada, and the Mt Gilmore CobaltCopper-Gold Project in Australia.

Lynn Lake Nickel-Copper-Sulphide Project, Manitoba - Canada

The Lynn Lake Mining Centre ( Lynn Lake ) in Manitoba, Canada, is a historically significant mining centre with large JORC compliant resources and supporting infrastructure. The recent recovery in the price of nickel has led Corazon to undertake a positive strategic review of Lynn Lake, as well as providing the opportunity to re-focus and accelerate its exploration and development plans to deliver value for shareholders.

Corazon has consolidated the entire Lynn Lake nickel camp and its extensive historical datasets, which includes more than 75 years of exploration and 24 years of mining information. Corazon is the first company to have control of the entire Lynn Lake nickel camp since mine closure in 1976, providing the opportunity to complete detailed interrogation and targeting within the mine area and across the wider project area.

The nickel-copper-cobalt sulphide deposits at Lynn Lake were mined continuously between 1954 and 1976 (in that time processing more than 20 million tonnes), and it was one of Canada’s major nickel mining centres of its time. Substantial resources remain and further extensive drill defined mineralisation also exists within the mining centre. These areas outline targets with the potential for further discoveries, which would underpin a potentially sizable resource base at Lynn Lake.

Lynn Lake has been described as one of the best “brown-fields” exploration plays in North America. With little modern exploration undertaken to date, the opportunity for discovery at Lynn Lake is substantial. New exploration techniques and a better understanding of these nickel-copper-cobalt sulphide systems has resulted in Corazon’s discovery of several new areas of mineralisation at Lynn Lake in recent years.

As part of Corazon’s process of defining Lynn Lake’s development potential, new quality resource estimations have been completed and modern metallurgy has delivered a major technical breakthrough, producing separate high-value and high-purity nickel and copper concentrates. This work will enable the determination of value for the large historical mining centre, at a time when there is an expectation of future increased demand for metals.

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Figure 1: Lynn Lake Project location map

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DIRECTOR’S REPORT (cont)

Mt Gilmore Cobalt-Copper-Gold Project, NSW - Australia

Corazon owns an 80% interest in the Mt Gilmore Cobalt-Copper-Gold Project ( Mt Gilmore ) (Figure 2), which is located 35 kilometres from the major centre of Grafton in north-eastern New South Wales, and is host to the unique, high-grade, cobalt-dominant Cobalt Ridge Deposit ( Cobalt Ridge ).

Since acquisition in mid-2016, Corazon’s exploration results have underpinned its belief that Mt Gilmore is prospective for hosting multiple rare cobalt-dominant sulphide deposits. Corazon’s exploration of the prospective +20 kilometre “Mt Gilmore trend” has recently uncovered a major copper-cobalt-silver-gold geochemical trend, representing a district-scale exploration play for large intrusive-related coppercobalt-gold deposits, and provides Corazon with a unique early-stage copper-driven opportunity.

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Figure 2: Mt Gilmore Project location map

EXPLORATION ACTIVITIES

LYNN LAKE NICKEL-COPPER-SULPHIDE PROJECT, MANITOBA - CANADA

Re-focus on Lynn Lake Nickel Precinct

The recent recovery in the price of nickel has led Corazon to undertake a positive strategic review of its Lynn Lake Project, and the opportunity to re-focus and accelerate its exploration and development plans.

The priority targets Corazon will focus on in its upcoming work program include near-surface mineralisation, as well as areas on-trend from the historical workings at Lynn Lake. Recent discoveries supporting the prospectivity of the mine area include:

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DIRECTOR’S REPORT (cont)

• “EL” Mine – Satellite Deposit

• The last work conducted by Corazon on the EL plug in 2011 returned drill intercepts of up to 23.75m @ 3.34% Ni, 1.54% Cu & 0.079 %Co at depth below the EL Mine. This mineralisation is open and provides some indication of the high-grade nature of the massive sulphide in the Lynn Lake area (refer to ASX announcement dated 8[th] June 2011).

• Shallow mineralisation around the workings at the EL Mine is extensive, with high-grade selvages requiring further drilling and potentially providing tonnages suitable for open-pit mining.

• Disco Deposit – Eastern Corridor within the “A” Plug (Main Mining Centre)

• A near surface deposit discovered in 2008 by Western Areas NL, the Disco discovery identifies the potential of the Eastern Corridor within the mining centre. The discovery hole returned 18m @ 1.5% Ni, 0.70% Cu and 0.04% Co. The mineralisation has been drilled to about 200 metres below surface and sits above a large untested geophysical anomaly.

• “A” Plug – Mine Corridor

• Numerous high priority targets have been identified which are associated with existing mineral resources. Proposed work will determine the priority of these targets, which will be ranked on the basis of proximity to mine infrastructure and grade.

Scoping Studies

As part of Corazon’s process of defining Lynn Lake’s development potential, new quality resource estimations have been completed and modern metallurgy has been undertaken. The metallurgical work has delivered a major technical breakthrough, for the first time in Lynn Lake’s history producing separate high-value and high-purity nickel and copper concentrates (refer to ASX announcements dated 11[th] and 12[th] February 2019). This work will underpin the commencement of a scoping study into the potential redevelopment of Lynn Lake.

New Mineral Resource Estimation

In the December Quarter, Corazon announced its new, upgraded Mineral Resource Estimate ( Resource Estimate ) for Lynn Lake (ASX announcement 11[th] October 2018). The newly upgrade Resource Estimate incorporates the EL, N, O, P and Disco deposits, and includes:

• 15.3Mt @ 0.72% Ni, 0.34% Cu, 0.034% Co (Indicated 12.9Mt and Inferred 2.4Mt, at a 0.5%Ni cut-off), for total contained metal of 110,400t Ni, 51,400t Cu, 5,200t Co

• The upgraded Resource also includes a high-grade Resource Estimate of 5.2Mt @ 1.00% Ni, 0.41% Cu, 0.044% Co (Indicated 4.3Mt and Inferred 0.9Mt, 0.7%Ni cut-off).

The Resource Estimate represents a 63% increase in total tonnes and a 35% increase in nickel and copper metal (in comparison to the previous Mineral Resource Estimate of 2015 - ASX announcement, 16[th] April 2015). The inclusion of cobalt in the new Resource Estimate (historically excluded) has added significant value, with cobalt being a metal credit not previously assessed in mining studies at Lynn Lake.

Lynn Lake hosts an additional 11 deposits, as well as numerous occurrences of drill-defined mineralisation, that have yet to be considered for resource studies. These areas support the potential for further upgrades to the Lynn Lake Mineral Resource.

This Resource Estimate provides an excellent foundation upon which to base mining and development studies. The historical drilling and mining information is of a very high quality and it is anticipated that very little additional work will be required to upgrade the majority of the defined tonnages in the Resource to the higher Measured JORC category.

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DIRECTOR’S REPORT (cont)

JORC Category	Base Cut Ni %	Tonnes	Ni %	Cu %	Co %		Tonnes	Tonnes	Tonnes
							Ni	Cu	Co
Indicated	0.5	12,899,000	0.7	0.33	0.034		89,700	42,900	4,400
Inferred	0.5	2,403,000	0.86	0.35	0.034		20,600	8,500	800
Total	0.5	15,302,000	0.72	0.34	0.034		110,300	51,400	5,200

JORC Category	Base Cut Ni%	Tonnes	Ni %	Cu %	Co %			Tonnes
							Ni	Cu	Co
Indicated	0.7	4,280,000	0.93	0.4	0.044		39,800	16,900	1,900
Inferred	0.7	903,000	1.33	0.47	0.043		12,100	4,300	400
Total	0.7	5,183,000	1.00	0.41	0.044		51,900	21,200	2,300

Table 1: Lynn Lake Indicated and Inferred Mineral Resource Estimate – October 2018

Metallurgical Testwork

The historical processing technology used at Lynn Lake for the extraction of nickel, copper and cobalt metals was developed in the 1950’s and 1960’s. Past nickel concentrate grades for Lynn Lake were reportedly between 8% and 15% nickel, with 22% of the copper also reporting to this concentrate. The low-grade characteristics of this concentrate were viewed as a serious potential impediment to any possible future mining operation.

Corazon believed modern advances in processing technology and effectiveness of modern reagents could be beneficial for the Lynn Lake material. Detailed metallurgical testwork commenced in the September Quarter (ASX announcement 18[th] September 2018), marking an important step in its development pathway for Lynn Lake. The testwork is designed to provide key data for future mining and development studies for the possible recommencement of mining at Lynn Lake.

In the March Quarter, Corazon announced exceptional results from its testwork, which have, for the first time delivered separate high-value nickel and copper concentrates (ASX announcements 11[th] and 12[th] February 2019). The results include:

• New nickel concentrate with a grade of 26% nickel with recoveries of 71%

• New copper concentrate with a grade of 27% copper with recoveries of 77%

These results are yet to be fully optimised and it is expected that on-going work will deliver further improvements on these excellent grades. This significant technical breakthrough supports the production and dispatch of separate copper and nickel concentrates from site to smelters, and remove the need for potentially costly secondary processing from a bulk (nickel-copper) concentrate onsite (historically the case at Lynn Lake).

Historical operations and metallurgical testwork completed since mine closure (as far as has been reported) were neither able to achieve the nickel grades observed in this current testwork, or able to produce separate nickel and copper concentrates with the purity of this testwork.

A new round of testwork is currently in progress, incorporating the same float circuit used in the previous testing, plus methodologies more representative of a commercial operation. This work is expected to optimise the methodology and deliver similar high-grade concentrates, but with increased recoveries. Internationally recognised metallurgical consultants, METS Engineering, are managing the metallurgical testwork, which is nearing completion.

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DIRECTOR’S REPORT (cont)

MT GILMORE COBALT-COPPER-GOLD PROJECT, NSW - AUSTRALIA

80% Earn-in Interest Completed

Post year-end, Corazon completed its 80% earn-in interest at Mount Gilmore (ASX announcement 2[nd ] July 2019). Corazon entered into an agreement with the project vendors, Providence Gold and Minerals Pty Ltd in 2016, giving it the right to earn up to an 80% interest in Mount Gilmore by completing $2 million in exploration expenditure at the project within three years of commencement of the agreement (ASX announcement 16[th] June 2016).

Cobalt Ridge Main Lode Drilling Program

During the December Quarter, Corazon announced additional assay results from its recent 21-hole, 2,967.65 metre drilling program, which was focused on the Main Lode at Cobalt Ridge. Numerous +1% cobalt assays were returned, with the best result being 5 metres @ 2.14% cobalt (ASX announcement 9[th] November 2018).

The results from this program provided Corazon with a strong understanding of the controls on the mineralisation. This data is being worked back into geological models for the Cobalt Ridge Main Lode and are also being used to identify priority drill target areas within parallel zones of mineralisation to the north and south of Cobalt Ridge.

Cobalt Ridge remains substantially under-drilled and there is demonstrated potential to define additional areas of mineralisation. The Cobalt Ridge Main Lode remains open in all directions and is only one of numerous parallel mineralised trends, defined by historical workings and broad-spaced drilling, that have yet to be targeted with resource definition drilling.

Discovery of Major New Copper-Cobalt-Silver-Gold Trend

In the March Quarter, Corazon announced the discovery of a major copper-cobalt-silver-gold trend at Mt Gilmore (ASX announcement 5[th] February 2019). Multiple, large (+1km) priority surface (soil) geochemical anomalies were discovered within the currently defined 22 kilometre-long mineralised Mt Gilmore Trend .

Initial field reconnaissance of the anomalous copper-cobalt-sliver trend at Mt Gilmore has identified several areas of hydrothermal alteration and disseminated sulphide mineralisation at surface. Sulphides observed include extensive disseminated pyrite, pyrrhotite and chalcopyrite (copper sulphide) - consistent with the geochemical anomalism identified by the Corazon’s soil sampling program.

This exploration work has proven to be highly effective in mapping alteration and mineralisation at Mt Gilmore and provides compelling evidence of an extensive hydrothermal event with metal associations indicative of large intrusive related copper-gold systems.

Corazon’s assessment that the numerous occurrences of copper-cobalt-gold mineralisation identified in late-1800’s/early-1900’s small scale mining operations may in fact be part of a much larger system represents a significant advancement for Mt Gilmore, substantially increasing its potential.

The new, high-tenor cobalt-copper-silver-gold soil sample anomalies are supported by high-grade rock chip samples (ASX announcement 22[nd] November 2018). Better results include up to 21.6% copper, 1,795ppm cobalt, 1.29g/t gold, 361ppm silver and 885ppm molybdenum . The structures hosting this mineralisation are interpreted to be “leakage-structures” from a concealed copper sulphide system.

This newly identified Mt Gilmore geochemical trend represents a district-scale exploration play for large intrusive-related copper-cobalt-gold deposits and provides Corazon with a unique early-stage copperdriven opportunity.

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DIRECTOR’S REPORT (cont)

Competent Persons Statement

The information in this report that relates to Exploration Results and Targets is based on information compiled by Mr Brett Smith, B.Sc Hons (Geol), Member AusIMM, Member AIG and an employee of Corazon Mining Limited. Mr Smith has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Smith consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

The information in this report that relates to Mineral Resources for the EL, Disco, ‘N’, ‘O ’and ‘P’ deposits contained within the Lynn Lake Nickel Project is based on information compiled by Mr Stephen Hyland who is a Fellow of the Australasian Institute of Mining and Metallurgy and who has provided expert guidance on resource modelling and resource estimation. Mr Hyland is a Principal Consultant Geologist at HGMC consultants and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Hyland consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

The information in this report that relates to the Processing and Metallurgy for the Lynn Lake Project is based on and fairly represents information and supporting documentation compiled by Damian Connelly who is a Member of The Australasian Institute of Mining and Metallurgy and a full time employee of METS Engineering (METS). Damian Connelly has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Damian Connelly consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to the Processing and Metallurgy for the Mount Gilmore project is based on and fairly represents information and supporting documentation compiled by Damian Connelly who is a Member of The Australasian Institute of Mining and Metallurgy and a full time employee of METS Engineering (METS). Damian Connelly has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Damian Connelly consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Canadian geologist Dr Larry Hulbert has been engaged by Corazon to manage the collation of past exploration information and the definition of new targets at Lynn Lake. Dr Hulbert has extensive knowledge of the Lynn Lake district and over 40 years’ experience in Ni-Cu-PGM exploration and research. Dr Hulbert is one of North America's foremost experts on magmatic sulphide deposits and would qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”.

Dr. Hulbert has authored numerous professional papers, was the recipient of the Barlow Medal from CIM in 1993, a Robinson Distinguished Lecturer for the Geological and Mineralogical Association of Canada for 2001-2002, and in 2003 received the Earth Sciences Sector Merit Award from Natural Resources Canada.

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DIRECTOR’S REPORT (cont)

CORPORATE ACTIVITIES

Annual General Meeting - 2018

On 27[th] November 2018, the Company held its Annual General Meeting of Shareholders. All resolutions put to the meeting were unanimously passed by a show of hands.

Placement and SPP

On 3[rd] April 2019, Corazon announced it had received commitments from sophisticated, professional and institutional investors totalling up to approximately $350,000 through a placement of up to approximately 116.7 million fully paid ordinary shares ( Shares ) at an issue price of $0.03 per Share ( Placement ). Participants in the Placement were also to be issued two (2) New Options (defined below) for every three (3) Shares subscribed for in the Placement.

Concurrently, Corazon announced its intent to conduct a Share Purchase Plan ( SPP ) to raise up to a further $1,000,000 on the same terms as the Placement. The funds raised pursuant to the Placement and SPP were used to accelerate exploration activities at the Mt Gilmore Project, targeting compelling copper-cobalt-silver surface anomalies.

Under the SPP, Corazon gave eligible shareholders the opportunity to subscribe for up to $15,000 worth of Shares at an issue price of $0.003 per Share, irrespective of the size of their shareholding. The record date for participation in the SPP was 2[nd] April 2019.

On 17[th] April 2019, the Company was granted a waiver from ASX Listing Rules 7.1 and 10.11 ( Waiver ) to the extent necessary to permit the Company, without obtaining Shareholder approval, to issue Shares under the Share Purchase Plan at an issue price no less than the lower of the issue price of the shares issued under the Placement (being $0.003 per Share) and 80% of the Company’s volume weighted average market Share price over the last 5 days on which trades were recorded, either before the day on which the SPP was announced or on which the Shares are issued under the SPP.

On 20[th] May 2019, Corazon advised it had reached an agreement with PAC Partners Securities Pty Ltd ( PAC ) whereby PAC agreed to partially underwrite the SPP for $500,000 and act as lead manager in the Placement of any potential shortfall under the SPP.

On 6[th] June 2019, Corazon advised that the closing date for the SPP had been extended from 6[th] June 2019 to 5.00pm 8[th] July 2019 to provide all eligible shareholders with an opportunity to participate in the SPP. The Company issued a supplementary prospectus on 7[th] June 2019.

Post year-end on 3[rd] July 2019, ASX Limited granted the Company a waiver from Listing Rule 14.7 to the extent necessary to permit the issue of up to 13,333,333 options exercisable at $0.007 expiring three (3) years from the date of issue to directors more than one (1) month after 30[th] May 2019, being the date that approval had been obtained from shareholders to issue the Options. The receipt of this waiver permits directors who are eligible shareholders to take up some or all of their respective entitlements under the SPP.

General Meeting Results

On 30 May 2019, a General Meeting was held to approve the issue of Shares to the vendors of the Mt Gilmore Project, as well as the issue of Options and other approvals related to the SPP. All resolutions put to the meeting were unanimously passed by a show of hands.

Mt Gilmore Project Ownership Equity Increased to 80%

Post year-end on 2[nd] July 2019, the Company increased its interest in the Mt Gilmore Project from 51% to 80% by issuing $250,000 worth of Shares to the Mt Gilmore vendors (details of the Mt Gilmore Project purchase agreement are set out in the ASX announcement released on 16[th] June 2016).

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DIRECTOR’S REPORT (cont)

Issue of Shares

On 10[th] April 2019, the Company issued 115,405,350 fully paid ordinary shares as a Placement to fund exploration expenditure and working capital.

Post year-end on 2[nd] July 2019, the Company issued 83,333,334 fully paid ordinary shares as consideration to acquire a further interest of 29% in the Mt Gilmore Project, increasing its interest to 80% of the project.

Change of Registered Office

On 23[rd] May, Corazon advised a change to its registered office and principle place of business with immediate effect to: Level 2, 38 Richardson Street West Perth, Western Australia, 6005. All other Company contact information remains the same.

Chairman Appointed

Post year-end, on 18[th] September 2019, Corazon announced that Mr Terry Streeter has joined the board as non-executive Chairman, to help drive and an accelerated exploration and development program at the Lynn Lake project. Mr Clive Jones stepped down as non-executive Chairman and will retain the role as non-executive Director.

Placement

Post year-end, on 18[th] September 2019, Corazon announced it has received firm commitments totalling approximately $1,000,000 through a Placement of approximately 417.6 million Ordinary shares in Corazon at an issue price of $0.0025 per Share, to sophisticated and professional investors.

An additional 10,000,000 Shares will be issued to Mr Terry Streeter, who will participate in the Placement, subject to shareholder approval at a general meeting.

The funds raised pursuant to the Placement will be used to accelerate exploration activities at the Lynn Lake Project, including studies to identify priority drill targets within the mine area and to commence a Scoping Study on the current resource areas.

8. Discussion and Analysis of Operations and the Financial Position

The net assets of the Consolidated Entity decreased from $5,186,204 at 30 June 2018 to $3,097,548 at 30 June 2019.

As at 30 June 2019, the Consolidated Entity had $414,675 (2018: $2,377,040) cash on hand. The Consolidated Entity may require further funding during the 2019 financial year in order to meet both day-to-day obligations as they fall due and progress its exploration projects. The Directors anticipate that future financing for exploration and mining activities will be secured in a reasonable timeframe and accordingly the directors consider it appropriate to prepare the financial statements on a going concern basis.

The Consolidated Entity continues to ensure that administration and overhead costs are kept to a minimum through sharing office, administration and accounting costs. The Consolidated Entity continually reviews the overhead associated with fees, consultants, corporate compliance and maintaining the listed entity and seeks to keep these costs to a minimum without compromising the entities commitment to appropriate corporate governance principles.

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DIRECTOR’S REPORT (cont)

Exploration

The Consolidated Entity has three main exploration projects those being the Lynn Lake and Victory projects, both in Manitoba, Canada, and the Mt Gilmore Project in NSW, Australia. In the consolidated financial statements, the Company’s Victory Project and Mt Gilmore Project are accounted for as an Exploration asset due to the Company’s ownership of each. However, the Lynn Lake Project is accounted for as Intangible assets and is impaired, due to the project being a staged option to acquire a project.

Exploration and evaluation costs are capitalised as exploration and evaluation assets on an area of interest basis. Exploration and evaluation assets are only recognised if:

• The Company has continuance of the rights to tenure of the areas of interest;

• The results of future exploration; and

• The recoupment of costs through successful development and exploitation of the areas of interest or alternatively by their sale.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. All exploration projects have been reviewed at 30 June 2019. Accordingly, the Consolidated Entity recorded an aggregate exploration expense of $1,560,341 (2018: $1,160,952) in the statement of profit or loss and other comprehensive income.

Each project is individually discussed below:

Victory Project

During the financial year, the Company assessed the carrying value of its exploration expenditure on the Victory Project and considered it was prudent to impair the carrying value due to the proximity to the decision in relation to retaining or relinquishing the Project in late 2019. Accordingly, the Consolidated Entity recorded an individual exploration expense of $1,255,915 (2018: NIL) for the Victory Project in the statement of profit or loss and other comprehensive income.

Lynn Lake Project

The Lynn Lake Project is presently a staged option to acquire the project with no current full legal right to the project. Accordingly, the Consolidated Entity recorded an individual exploration expense of $304,426 (2018: $1,149,484) for the Lynn Lake Project in the statement of profit or loss and other comprehensive income.

An intangible asset which is not ready for use is required to be tested for impairment annually. The Consolidated Entity has performed the impairment test and considered it is appropriate that the Lynn Lake Project also be impaired as at 30 June 2019. Accordingly, the Consolidated Entity has recorded an impairment expense of $216,414 (2018: $205,952).

Mt Gilmore Project

During the financial year, the Company assessed the carrying value of its exploration expenditure on the Mt Gilmore Project and considered it to be a reflection of fair value on the basis of the facts and circumstances notably the continued exploration expenditure and activities and the acquisition of a further 29% interest in the project.

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DIRECTOR’S REPORT (cont)

9. Significant Changes in State of Affairs

There have been no significant changes in the state of affairs of the Consolidated Entity other than those disclosed in the Review of Operations.

10. After Reporting Date Events

On 2 July 2019 the Company issued 83,333,334 fully paid ordinary shares at an issue price of $0.003 to Providence Gold and Minerals Pty Ltd to acquire a further 29% in the Mt Gilmore Project. This recent acquisition increased the Company’s interest in the project from 51% to 80%.

On 10 July 2019 the Company issued the following allotments of securities:

1. 166,666,622 fully paid ordinary shares with an issue price of $0.003, raising $500,000 for Company exploration programs and working capital purposes as per the Company Share Purchase Plan (SPP);

2. 188,047,956 listed options exercisable at $0.007 each on or before 10 July 2022, these options were free attaching to fully paid ordinary shares issued as per this SPP (76,936,895 listed options attributable), and also the April 2019 capital raising (111,111,061 listed options).

On 30 July 2019 the Company announced a lapse of 20,000,000 unlisted options exercisable at $0.015.

On 23 August 2019 the Company announced a lapse of 85,000,000 unlisted options exercisable at $0.03.

On 18 September 2019, Corazon announced that Mr Terry Streeter has joined the board as nonexecutive Chairman, to help drive and an accelerated exploration and development program at the Lynn Lake Project. Mr Clive Jones stepped down as non-executive Chairman and will retain the role as nonexecutive Director.

On 18 September 2019, Corazon announced it has received firm commitments totalling approximately $1,000,000 through a Placement of approximately 417.6 million Ordinary shares in Corazon at an issue price of $0.0025 per share

No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity in future financial years.

11. Future Developments, Prospects and Business Strategies

The Consolidated Entity will continue its mineral exploration activity at and around its exploration projects with the object of identifying commercial resources.

12. Environmental Issues

The Consolidated Entity is aware of its environmental obligations with regards to its exploration activities and ensures that it complies with all regulations when carrying out any exploration work.

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DIRECTOR’S REPORT (cont)

13. Information on Directors

Mr Terry Streeter	—	Non-Executive Chairman
Qualifications		None
Experience	—	Mr Streeter has extensive experience in funding, listing and
		overseeing junior explorers in all exploration and economic
		cycles and has served in various roles in the nickel sulphide
		industry for over 30 years. He was a Director of West
		Australian nickel explorer and miner Jubilee Mines NL from
		1993 to May 2004 and was a founding shareholder of
		Western Areas NL (ASX: WSA) in 1999, which went on to
		discover and develop two high-grade nickel sulphide mines
		in the Forrestania region of Western Australia. He served as
		a Non-Executive Director of Western Areas from 1999, and
		Non-Executive Chairman from 2007 to November 2013. He
		is currently a Non-Executive Chairman of Fox Resources Ltd,
		Non-Executive Chairman of Moho Resources Ltd and Non-
		Executive Director of Emu Resources NL.
Interest in Shares and Options	—	None
Length of Service		From 18 September 2019 to present
Directorships held in other	—	Fox Resources Ltd since June 2005 to present
listed entities in the last three		Midas Resources Ltd from June 2001 to April 2013
years		Alto Metals Ltd from March 2018 to November 2018
		Moho Resources Ltd from August 2018 to present
		Emu Resource NL from November 2018 to present
Mr Clive Jones	—	Non-Executive Director
Qualifications	—	B App Sc (Geol)
Experience	—	Mr Jones has been involved in the minerals industry for
		over 30 years and has worked on the exploration and
		development of a range of commodities both in Australia
		and overseas and has a history of corporate and technical
		successes. Mr Jones is currently joint Managing Director of
		Cazaly Resources Ltd and a Director of Bannerman
		Resources Ltd. These companies are currently listed on the
		Australian Securities Exchange.
Interest in Shares and Options	—	7,568,663 fully paid ordinary shares
		5,000,000 options exercisable at $0.035 expiring 31
		March 2020
		2,222,222 options exercisable at $0.007 expiring 10 July
		2022
Length of Service	—	From 10 February 2005 to present
Directorships held in other	—	Bannerman Resources Ltd from 12 January 2007 to
listed entities in the last three		present
years		Cazaly Resources Ltd from 15 September 2003 to present
Mr Brett Smith	—	Executive Managing Director
Qualifications	—	BSc Hons, MAusIMM, MAIG, MAICD
Experience	—	Mr Smith has been involved in the mining and exploration
		industry for over 30 years as a geologist, manager and
		director of publicly listed companies and has broad
		industry experience in exploration and development.
Interest in Shares and Options	—	10,440,463 fully paid ordinary shares

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DIRECTOR’S REPORT (cont)

10,000,000 options exercisable at $0.035 expiring 31 March 2020

		10,000,000 options exercisable at $0.035 expiring 31 March 2020
		2,222,220 options exercisable at $0.007 expiring 10 July
		2022
Length of Service	—	From 1 July 2010 to present
Directorships held in other	—	Battery Minerals Limited (formerly known as Metals of
listed entities in the last three		Africa Ltd) from 1 August 2012 to 21 May 2019
years		Pacific Bauxite Limited (formerly known as Iron Mountain
		Mining Limited) 7 May 2014 to 29 November 2018
Mr Jonathan Downes	—	Non-Executive Director
Qualifications	—	B Sc Geol, MAIG
Experience	—	Mr Downes has over 25 years of experience in the
		minerals industry and has worked in various geological
		and corporate capacities. Mr Downes has experience in
		nickel, gold and base metals and has been intimately
		involved with numerous private and public capital raisings.
		Mr Downes was a founding director of Hibernia Gold (now
		Moly Mines Ltd) and Siberia Mining Corporation Ltd. Mr
		Downes is a Non-Executive Director of Ironbark Zinc Ltd.
Interest in Shares and Options	—	9,357,370 fully paid ordinary shares
		7,000,000 options exercisable at $0.035 expiring 31
		March 2020
Length of Service		From 10 April 2006 to present
Directorships held in other	—	Ironbark Zinc Ltd from 18 April 2006 to present
listed entities in the last three		Galena Mining Limited from 7 September 2017 to present
years		Sabre Resources Ltd from 14 December 2007 to 7
		December 2016
Dr. Mark Qiu	—	Non-Executive Director
Qualifications	—	PhD Economic Geology
Experience	—	Dr. Mark Yumin Qiu has a PhD in Economic Geology from the
		University of Western Australia and has a strong track record in
		project generation and development in the resources industry.
		Dr. Qiu was previously General Manager, Project Generation
		and Acquisition and Head of Exploration and Business
		Development at Sino Gold. In this role Dr. Qiu played a key role
		in the development of the business, from its formation to its
		$100 million IPO on ASX in 2002 and its $2.5 billion sale to
		Eldorado Gold Corporation in 2009. At Sino Gold, he led the
		team that discovered the White Mountain gold deposit and
		brought it into production within four years.
		Most recently in 2013, Dr Qiu led the acquisition of the
		Southern Cross Operations at Marvel Loch in WA. After its
		successful exploration and development into production in
		2015, the Project was sold for $330 million in February 2017.
Interest in Shares and Options	—	1,269,300 fully paid ordinary shares
Length of Service		18 August 2017 to present
Directorships held in other		Primary Gold Limited from 31 March 2014 to 8 May 2018
listed entities in the last three		China Hanking Holdings Limited (HKSX: 03788) from February
years		2012 to present

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DIRECTOR’S REPORT (cont)

14. Remuneration Report (audited)

This report details the nature and amount of remuneration for each key management person of Corazon Mining Limited.

Names and positions held by Consolidated and Parent Entity key management personnel in office at any time during the financial year are:

Key Management Personnel Position Clive Jones Non-Executive Chairman Brett Smith Executive Managing Director Jonathan Downes Non-Executive Director Mark Qui Non-Executive Director Robert Orr Company Secretary

This remuneration report, which forms part of the Directors’ Report, sets out information about the remuneration of Corazon Mining Limited’s key management personnel, comprising the directors of the Company, for the financial year ended 30 June 2019. Disclosures required under AASB 124 Related Party Disclosures have been transferred from the financial report and have been audited. The additional disclosures required by the Corporations Act 2001 and the Corporations Regulations 2001 have not been audited.

Remuneration policy

The Board’s policy for determining the nature and amount of remuneration for key management personnel of the Consolidated Entity is as follows:

• The remuneration policy, setting the terms and conditions for the key management personnel, was developed and approved by the Board.

• All key management personnel receive a base salary (which is based on factors such as length of service and experience) and their package may include superannuation, fringe benefits, options and performance incentives.

• The Board reviews key management personnel packages annually by reference to the Consolidated Entity’s performance, executive performance and comparable information from industry sectors.

The Board’s remuneration policy is designed to attract the highest calibre of executives and reward them for performance that results in long-term growth in shareholder wealth.

Key management personnel are also invited to participate in employee option arrangements.

The key management personnel receive a superannuation guarantee contribution required by the government, which is currently 9.5%, and do not receive any other retirement benefits.

Shares given to key management personnel are valued as the difference between the market price of those shares and the amount paid by the key management personnel. Options are valued using the Black-Scholes option pricing model.

The Board policy is to remunerate Non-Executive Directors at market rates for time, commitment and responsibilities. The Board determines payments to the Non-Executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to NonExecutive Directors is subject to approval by shareholders at the Annual General Meeting. Fees for Non-

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DIRECTOR’S REPORT (cont)

Executive Directors are not linked to the performance of the Consolidated Entity. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the company and are able to participate in the Employee Incentive Scheme (‘EIS’).

Performance-based remuneration

The Company is an exploration entity and therefore speculative in terms of performance. Consistent with attracting and retaining talented executives, directors and senior executives are paid market rates associated with individuals in similar positions, within the same industry. The Board does not endorse the use of bonus payments for directors and senior executives at this point in time. Performance incentives will be issued in the event that the entity moves from an exploration to a producing entity, and key performance indicators such as growth and profits will be used as measurements for assessing Board performance.

Company performance, shareholder wealth and Director and Executive remuneration

The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives by the issue of options to some directors and key executives to encourage the alignment of personal and shareholder interests.

Key terms of employment contracts

• The contracts for service between the Company and its directors are on a continuing basis, the terms of which are not expected to change in the immediate future. Upon retirement key management personnel are paid employee benefit entitlements accrued to date of retirement.

• The employment contract states a three month resignation notice period. The Company may terminate an employment contract without cause by providing three months’ written notice or making payment in lieu of notice based on the individual’s annual salary component.

Names and positions held of Consolidated and Parent Entity key management personnel in office at any time during the financial year are:

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DIRECTOR’S REPORT (cont)

2019

2019
Company Key Management Personnel	Position held as at 30 June 2019 and any change during the year	Contract details	Proportion of elements of remuneration related to performance			Proportion of elements of remuneration not related to performance (Salary/fees/ superannuation)		Total
			Non-Salary cash-based incentives	Shares/ Units	Options/ Rights	Cash- based	Shares/ Units
			%	%	%	%	%	%
Clive Jones	Non- Executive Chairman	No fixed term.	-	-	-	100	-	100
Brett Smith	Executive Managing Director	No fixed term. 3 months notice required to terminate.	-	-	-	100	-	100
Jonathan Downes	Non- Executive Director	No fixed term.	-	-	-	100	-	100
Mark Qui	Non- Executive Director	No fixed term.	-	-	-	100	-	100
Robert Orr	Company Secretary	No fixed term	-	-	-	100	-	100

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DIRECTOR’S REPORT (cont)

2018

2018
Company Key Management Personnel	Position held as at 30 June 2019 and any change during the year	Contract details	Proportion of elements of remuneration related to performance			Proportion of elements of remuneration not related to performance (Salary/fees/ superannuation)		Total
			Non-Salary cash-based incentives	Shares/ Units	Options/ Rights	Cash- based	Shares/ Units
			%	%	%	%	%	%
Clive Jones	Non- Executive Chairman	No fixed term.	-	-	-	100	-	100
Brett Smith	Executive Managing Director	No fixed term. 3 months notice required to terminate.	-	-	-	100	-	100
Adrian Byass	Non- Executive Director	No fixed term.	-	-	-	100	-	100
Jonathan Downes	Non- Executive Director	No fixed term.	-	-	-	100	-	100
Mark Qui	Non- Executive Director	No fixed term.	-	-	-	100	-	100
Robert Orr	Company Secretary	No fixed term	-	-	-	100	-	100

This report details the nature and amount of remuneration for each key management person of Corazon Mining Limited, and for the executives receiving the highest remuneration.

Key Management Personnel Remuneration

Key Management Personnel 2019 Clive Jones Brett Smith Jonathan Downes Mark Qui Robert Orr	Short Term Employee Benefits Post- Employment Benefits Share Based Payments Share Based Payments Total Cash and salary Superannuation Non- Performance (a) Performance (b) $ $ $ $ $ 55,000 - - - 55,000 240,000 - - - 240,000 41,096 3,904 - - 45,000 45,000 - - - 45,000 56,760 - - - 56,760
	437,856 3,904 - - 441,760

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DIRECTOR’S REPORT (cont)

Key Management Personnel Remuneration

Key Management Personnel 2018 Clive Jones Adrian Byass Brett Smith Jonathan Downes Mark Qui Robert Orr	Short Term Employee Benefits Post- Employment Benefits Share Based Payments Share Based Payments Total Cash and salary Superannuation Non- Performance (a) Performance (b) $ $ $ $ $ 52,504 - - - 52,504 16,000 - - - 16,000 229,350 - - - 229,350 40,639 3,861 - - 44,500 39,070 - - - 39,070 54,610 - - - 54,610
	432,173 3,861 - - 436,034

Performance income as a proportion of total income

No bonuses were paid to Executive or Non-Executive Directors during the year.

Option Holdings

The number of options over ordinary shares in the Company held during the financial year by each director and other members of key management personnel of the Consolidated Entity, including the personally related parties, is set out below:

Clive Jones Brett Smith Jonathan Downes Mark Qui Robert Orr	Balance 1.7.2018 Granted as Compensation Options Exercised Options Expired Net Change Other Balance 30.06.2019 Total Vested and Exercisable 5,000,000 - - - - 5,000,000 5,000,000 10,000,000 - - - - 10,000,000 10,000,000 7,000,000 - - - - 7,000,000 7,000,000 - - - - - - - 3,000,000 - - - - 3,000,000 3,000,000
	25,000,000 - - - - 25,000,000 25,000,000

Share holdings

The number of shares in the company held during the financial year by each director and other member of key management personnel of the Consolidated Entity including their personally related parties is set out below:

Clive Jones Brett Smith Jonathan Downes Mark Qui Robert Orr	Balance 1.7.2018 Received as Compensation Options Exercised Net Change Other Balance on Resignation / Appointment Balance 30.6.2019 4,235,330 - - - - 4,235,330 7,107,131 - - - - 7,107,131 9,357,370 - - - - 9,357,370 1,269,300 - - - - 1,269,300 1,843,940 - - - - 1,843,940
	23,813,071 - - - - 23,813,071

End of Remuneration report

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DIRECTOR’S REPORT (cont)

15. Meetings of Directors

During the financial year, eleven meetings of directors were held. Attendances by each director during the year was as follows:

Directors’ Meetings

Number Eligible to Number attended Attend Clive Jones 11 11 Brett Smith 11 11 Jonathan Downes 11 11 Mark Qiu 11 10

16. Indemnifying Officers

During or since the end of the financial year the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows:

The Company has paid premiums to insure each of the Directors and officers against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director of the Company, other than conduct involving a wilful breach of duty in relation to the Company. The amount of the premium was $13,500 (2018: $8,000) and extends to cover the following Directors and officers:

• Terry Streeter

• Clive Jones  Brett Smith  Jonathan Downes  Mark Qiu

• Robert Orr

17.

Indemnity and Insurance of Auditor

The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity.

18. Options

At the date of this report, the unissued ordinary shares of Corazon Mining Limited under option are as follows:

Grant Date Date of Expiry Exercise Price 31/03/2017 31/03/2020 $0.035 10/07/2019 10/07/2022 $0.007	Number under Option 40,000,000 188,047,956
	228,047,956

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DIRECTOR’S REPORT (cont)

19.

Proceedings on Behalf of Company

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

The Company was not a party to any such proceedings during the year.

20. Non-Audit Services

The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

• all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and the objectivity of the auditor; and

• the nature of the services provided to not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

The following fees were paid to PKF Perth for non-audit services provided during the year ended 30 June 2019:

Taxation compliance service $4,200 (2018: $3,900)

21. Officers of the company who are former partners of PKF Perth

There are no officers of the company who are former partners of PKF Perth.

22. Auditor’s Independence Declaration

The lead auditor’s independence declaration for the year ended 30 June 2019 has been received and can be found on page 23 of the Directors’ Report.

Signed in accordance with a resolution of the Board of Directors.

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______ Brett Smith Executive Managing Director Dated this 20[th] day of September 2019

22

PKF Perth

AUDITOR’S INDEPENDENCE DECLARATION

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TO THE DIRECTORS OF CORAZON MINING LIMITED

In relation to our audit of the financial report of Corazon Mining Limited for the year ended 30 June 2019, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

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PKF PERTH

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SHANE CROSS PARTNER

20 SEPTEMBER 2019 WEST PERTH, WESTERN AUSTRALIA

Level 4, 35 Havelock Street, West Perth, WA 6005 PO Box 609, West Perth, WA 6872

T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au

PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Note Other revenue 2 Administrative expense Compliance and regulatory expense Consultancy expense Depreciation and amortisation expense Directors fees Employee benefits expense 3 Impairment of exploration expenditure 3,13 Fair value movements on financial assets 3 Finance costs Impairment of intangible asset 3,11 Insurance expense Occupancy expense Realised loss on disposal of fixed assets Travel expenses Profit/(loss) for the year from continuing operations Income tax expenses 4 Profit/(loss) for the year Other comprehensive income/(loss),net of income tax Items that may be reclassified subsequently to profit and loss Net changes in fair value of financial assets Other comprehensive profit/(loss) (net of tax) Total comprehensive profit/(loss) for the year Basic and diluted profit/(loss) per share for continuing and discontinuing operations (cents per share) 5	2019 $ 229,090 (96,060) (227,663) (140,450) (5,053) (189,096) (14,737) (1,560,341) (1,550) 1,311 (216,414) (27,662) (59,892) (28,033) (16,072) (2,352,622) - (2,352,622) - - (2,352,622) (0.18)	2018 $ 2,378 (72,560) (185,279) (151,070) (4,884) (194,083) (12,894) (1,160,952) (1,000) (2,149) (205,952) (25,078) (34,468) - (17,996) (2,065,987) - (2,065,987) - - (2,065,987) (0.19)

The accompanying notes form part of these financial statements.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019

Note CURRENT ASSETS Cash and cash equivalents 6 Trade and other receivables 7 Other assets 8 TOTAL CURRENT ASSETS NON-CURRENT ASSETS Other assets 8 Financial assets 9 Intangible asset 11 Plant and equipment 12 Exploration and evaluation expenditure 13 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 14 Provisions 15 TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 16 Reserves 17 Accumulated losses TOTAL EQUITY	2019 $ 414,675 27,860 47,978 490,513 59,000 953 - - 3,203,784 3,263,737 3,754,250 645,869 10,833 656,702 656,702 3,097,548 38,154,907 1,298,150 (36,355,509) 3,097,548	2018 $ 2,377,040 79,706 25,718
		2,482,464
		59,000 2,503 - 33,086 3,149,997
		3,244,586
		5,727,050
		540,846 -
		540,846
		540,846
		5,186,204
		37,890,941 1,298,150 (34,002,887)
		5,186,204

The accompanying notes form part of these financial statements.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Balance at 1 July 2017 Profit/(loss) for the year Other comprehensive income Total other comprehensive loss Transactions with owners, recorded directly in equity Issue of share capital Acquisition of further interest in Mt Gilmore Project Transaction costs on share issue Total transactions with owners Balance at 30 June 2018 Profit/(loss) for the year Other comprehensive income Total other comprehensive loss Transactions with owners, recorded directly in equity Issue of share capital Transaction costs on share issue Total transactions with owners Balance at 30 June 2019

Issued Capital Share Based Payments Reserve Contingent Reserves Accumulated Losses Total $ $ $ $ $ 32,772,510 994,400 303,750(31,936,900) 2,133,760 - - - (2,065,987) (2,065,987) - - - - - - - - (2,065,987) (2,065,987) 5,172,993 - - - 5,172,993 150,000 - - - 150,000 (204,562) - - - (204,562) 5,118,431 - - - 5,118,431 37,890,941 994,400 303,750 (34,002,887) 5,186,204 - - - (2,352,622) (2,352,622) - - - - - - - - (2,352,622) (2,352,622) 346,216 - - - 346,216 (82,250) - - - (82,250) 263,966 - - - 263,966 38,154,907 994,400 303,750 (36,355,509) 3,097,548

The accompanying notes form part of these financial statements.

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CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Note CASH FLOWS FROM OPERATING ACTIVITIES Interest received Payment for administration and corporate costs Payments for environmental bonds Payments for exploration and evaluation Proceeds from Research & Development grant Payments for staff costs Net cash generated from/(used in) operating activities 21 CASH FLOWS FROM INVESTING ACTIVITIES Payments for intangible assets Payments for plant and equipment Net cash generated from/(used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Payment for costs of capital raising Net cash generated from financing activities Net increase/(decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year 6	2019 $ 1,437 (491,429) - (1,694,117) 227,652 (169,159) (2,125,616) (162,092) (726) (162,818) 346,216 (20,147) 326,069 (1,962,365) 2,377,040 414,675	2018 $ 2,380 (562,964) (4,000) (2,985,288) - (171,482)
		(3,721,354)
		(205,952) (18,515)
		(224,467)
		5,172,993 (204,562)
		4,968,431
		1,022,610 1,354,430
		2,377,040

The accompanying notes form part of these financial statements.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial report of Corazon Mining Limited for the year ended 30 June 2019 was authorised for issue in accordance with a resolution of Directors on 20 September 2019. The Directors have the power to amend and reissue the financial statements.

This financial report includes the consolidated financial statements and notes of Corazon Mining Limited (‘the Company’) and controlled entities (‘Consolidated Entity’ or ‘Group’).

Corazon Mining Limited is a listed public company, trading on the Australian Securities Exchange, limited by shares, incorporated and domiciled in Australia.

New, revised or amending Accounting Standards and Interpretations adopted

The Consolidated Entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

AASB No.	Title	Application date of **standard ***	Issue date
AASB 2017-4	Amendments to Australian Accounting Standards – Uncertainty over Income Tax Treatments	1 January 2019	July 2017
AASB 2017-6	Amendments to Australian Accounting Standards – Prepayment Features with Negative Compensation	1 January 2019	December 2017
AASB 2017-7	Amendments to Australian Accounting Standards – Long-term Interests in Associates and Joint Ventures	1 January 2019	December 2017
AASB 2018-1	Amendments to Australian Accounting Standards – Annual Improvements 2015-2017 Cycle	1 January 2019	February 2018
AASB 2018-2	Amendments to Australian Accounting Standards – Plan Amendment, Curtailment or Settlement	1 January 2019	March 2018
AASB 2018-6	Amendments to Australian Accounting Standards – Definition of a Business	1 January 2020	December 2018
AASB 2018-7	Amendments to Australian Accounting Standards – Definition of Material	1 January 2020	December 2018
AASB 2019-1	Amendments to Australian Accounting Standards – References to the Conceptual Framework	1 January 2020	May 2019
AASB 16	Leases	1 January 2019	February 2016
AASB Interpretation 23	Uncertainty over Income Tax Treatments	1 January 2019	June 2017

The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Consolidated Entity.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

The following Accounting Standards and Interpretations are most relevant to the consolidated entity:

AASB 9 Financial Instruments

The Consolidated Entity has adopted AASB 9 from 1 July 2018. The standard introduced new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows which arise on specified dates and that are solely principal and interest. A debt investment shall be measured at fair value through other comprehensive income if it is held within a business model whose objective is to both hold assets in order to collect contractual cash flows which arise on specified dates that are solely principal and interest as well as selling the asset on the basis of its fair value. All other financial assets are classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading or contingent consideration recognised in a business combination) in other comprehensive income ('OCI'). Despite these requirements, a financial asset may be irrevocably designated as measured at fair value through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities designated at fair value through profit or loss, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected credit losses using a lifetime expected loss allowance is available.

AASB 15 Revenue from Contracts with Customers

The Consolidated Entity has adopted AASB 15 from 1 July 2018. The standard provides a single comprehensive model for revenue recognition. The core principle of the standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduced a new contract-based revenue recognition model with a measurement approach that is based on an allocation of the transaction price. This is described further in the accounting policies below. Credit risk is presented separately as an expense rather than adjusted against revenue. Contracts with customers are presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria, be capitalised as an asset and amortised over the contract period.

Basis of Preparation

The accounting policies set out below have been consistently applied to all years presented.

Statement of Compliance

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards (AASBs) (including Australian Interpretations) issued by the Australian Accounting Standard Board (AASB) and the Corporations Act 2001 as appropriate for for-profit oriented entities. The consolidated financial report of the Group complies with International Financial Reporting Standards (IFRSs) and Interpretations as issued by the International Accounting Standards Board (IASB).

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

Basis of Measurement

The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

a. Significant accounting estimates, judgments and assumptions

The preparation of financial statements requires management to make judgments and estimates relating to the carrying amounts of certain assets and liabilities. Actual results may differ from the estimates made. Estimates and assumptions are reviewed on an on-going basis.

The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next accounting period are:

(i) Share based payment transactions

The Consolidated Entity measures the cost of equity settled transactions by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of share options is determined using an appropriate valuation model. Refer to note 20 for further details.

• (ii) Impairment of exploration and evaluation assets and investments in and loans to subsidiaries

The ultimate recoupment of the value of exploration and evaluation assets, the Company’s investment in subsidiaries, and loans to subsidiaries is dependent on the successful development and commercial exploitation, or alternatively, sale, of the exploration and evaluation assets.

Impairment tests are carried out on a regular basis to identify whether the asset carrying values exceed their recoverable amounts. There is significant estimation and judgement in determining the inputs and assumptions used in determining the recoverable amounts.

The key areas of judgement and estimation include:



Recent exploration and evaluation results and resource estimates; Environmental issues that may impact on the underlying tenements;

 Fundamental economic factors that have an impact on the planned operations and carrying values of assets and liabilities. Refer to note 13 for further details.

(iii) Income tax expenses

Judgement is required in assessing whether deferred tax assets and liabilities are recognised on the statement of financial position. Deferred tax assets, including those arising from temporary differences, are recognised only when it is considered more likely than not that they will be recovered, which is dependent on the generation of future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised. Refer to note 4 for further details.

(iv) Classification of investments

The Group has decided to classify investments in listed securities as financial assets. These securities are accounted for at fair value. Any increments or decrements in their value at year end are charged or credited to the revaluation reserves, unless they are impaired, of which any accumulated losses are reclassified to the statement of comprehensive income for the current year. Refer to note 9 for further details. (v) Intangible assets

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

As the ownership in the Lynn Lake Project is an option to acquire and considered to be an intangible asset, exploration and evaluation expenditure has been expensed in the statement of comprehensive income until such time that the Company converts its option to an ownership interest. Refer to note 11 for further details.

(vi) Fair value measurement hierarchy

The Consolidated Entity is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant to fair value and therefore which category the asset or liability is placed in can be subjective.

The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include discounted cash flow analysis or the use of observable inputs that require significant adjustments based on unobservable inputs.

b. Principles of Consolidation

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Corazon Mining Limited (“Corazon”) as at 30 June 2019 and the results of all controlled entities for the year then ended. Corazon Mining Limited and its controlled entities together are referred to in this financial report as the “Consolidated Entity” or “Group”.

Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity controls an entity when the Consolidated Entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Consolidated Entity. They are de-consolidated from the date that control ceases.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. All controlled entities have a June financial year.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the Parent.

Where the Consolidated Entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Consolidated Entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.

A list of controlled entities is contained in Note 10 to the financial statements.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

c. Exploration and Evaluation Assets

Exploration and evaluation expenditure and earn-in expenditure, including the costs of acquiring licences, are capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the Consolidated Entity has obtained the legal rights to explore an area are recognised in the statement of profit or loss and other comprehensive income.

Exploration and evaluation assets are only recognised if the rights of interest are current and either:

• The expenditures are expected to be recouped through successful development and exploitation of the area of interest; or

• Activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are continuing.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

An impairment exists when the carrying amount of capitalised exploration and evaluation expenditure relating to an area of interest exceeds its recoverable amount. The asset is then written down to its recoverable amount. Any impairment losses are recognised in the statement of profit and loss and other comprehensive income.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified from exploration and evaluation expenditure to mining property and development assets within property, plant and equipment and depreciated over the life of the mine.

Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Where applicable, such costs are determined using estimates of future costs, current legal requirements and technology on an undiscounted basis.

d. Impairment

• (i) Financial Assets

The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.

Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.

For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.

• (ii) Exploration and Evaluation Assets

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount at the reporting date.

Exploration and evaluation assets are tested for impairment in respect of cash generating units, which are no larger than the area of interest to which the assets relate.

• (iii) Non-financial Assets other than Exploration and Evaluation Assets

The carrying amounts of the Consolidated Entity’s non-financial assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated at each reporting date.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss is recognised if the carrying amount of an asset or its cashgenerating unit exceeds its recoverable amount. Impairment losses are recognised in the statement of profit or loss and other comprehensive income. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units, then to reduce the carrying amount of the other assets in the unit on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exits. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss has been recognised.

e. Income Tax

The charge for current income tax expense is based on the profit or loss for the year adjusted for any non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the reporting date.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on either accounting profit or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Consolidated Entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

Tax Consolidation

Corazon Mining Limited and its wholly-owned Australian subsidiaries have not formed an income tax consolidated group under tax consolidation legislation.

f. Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

Plant and equipment

Plant and equipment are measured on the cost basis.

The cost of fixed assets constructed within the Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the financial year in which they are incurred.

g. Depreciation

The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is depreciated on a diminishing value basis over the asset’s useful life to the Consolidated Entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable assets are:

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

Class of Fixed Asset	Depreciation Rate
Plant and equipment	30-40%
Office furniture and equipment	18%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of profit or loss and other comprehensive income. When re-valued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings

h. Financial Instruments

Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being avoided.

Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, it's carrying value is written off.

Financial assets at fair value through profit or loss

Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.

Financial assets at fair value through other comprehensive income

Financial assets at fair value through other comprehensive income include equity investments which the consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.

Impairment of financial assets

The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.

Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.

For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.

i. Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principle market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fairvalue, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed each reporting date and transfers between levels are determined based on a reassessment of the lowest level input that is significant to the fair value measurement.

For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

j. Foreign Currency Transactions and Balances

Functional and presentation currency

The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

Exchange differences arising on the translation of monetary items are recognised in the statement of profit or loss and other comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the statement of profit or loss and other comprehensive income.

Group companies

The financial results and position of foreign operations whose functional currency is different from the Group’s presentation currency are translated as follows:

• assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;

• income and expenses are translated at average exchange rates for the period; and

• retained earnings are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency translation reserve in the statement of financial position. These differences are recognised in the statement of profit or loss and other comprehensive income in the period in which the operation is disposed.

k. Employee Benefits

• a. Wages, salaries and annual leave

Liabilities for wages, salaries and annual leave expected to be settled within one year of the reporting date are recognised in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

• b. Employee benefits payable later than one year

Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

• c. Superannuation

Contributions are made by the Consolidated Entity to superannuation funds as stipulated by statutory requirements and are charged as expenses when incurred.

• d. Employee benefit on costs

Employee benefit on costs, including payroll tax, are recognised and included in employee benefits liabilities and costs when the employee benefits to which they relate are recognised as liabilities.

e. Equity settled compensation

Equity-settled and cash-settled share-based compensation benefits are at times provided to employees.

Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the Consolidated Entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.

The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.

If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification.

If the non-vesting condition is within the control of the Consolidated Entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the Consolidated Entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.

If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification.

l. Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other shortterm highly liquid investments with original maturities of 3 months or less, and bank overdrafts that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

m. Revenue and Other Income

Revenue is recognised when it is probable that the economic benefit will flow to the Consolidated Entity and the revenue can be reliably measured.

Interest revenue is recognised as it accrues. Dividend revenue is recognised when the right to receive a dividend has been established.

n. Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the statement of cash flow on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

o. Trade and Other Receivables

Other receivables are recognised at amortised cost, less any provision for impairment.

Collectability of receivables is reviewed on an on-going basis. Debts which are known to be uncollectible are written off. A provision for impairment is raised when some doubt as to collection exists.

p. Earnings per share (EPS)

Basic earnings per share

Basic earnings per share is determined by dividing the net profit after income tax attributable to members of the Consolidated Entity, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

q. Contributed Equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

r.

Investments

Interests in listed and unlisted securities are initially brought to account at cost.

Controlled entities are accounted for in the consolidated financial statements as set out in Note 1(b).

Other securities are included at fair value at reporting date. Unrealised gains/losses on securities held for short term and long term investment are accounted for as set out in Note 1 (iv).

s.

Current and non-current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.

An asset is current when: it is expected to be realised or intended to be sold or consumed in normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within twelve months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current.

A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within twelve months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current.

t.

Acquisition of Assets

The purchase method of accounting is used for all acquisitions of assets regardless of whether equity instruments or other assets are acquired. Cost is determined as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs directly attributable to the acquisition.

u.

Parent entity information

In accordance with the Corporations Act 2001, these financial statements present the results of the Consolidated Entity only. Supplementary information about the Parent entity is disclosed in Note 30.

v. Operating segments

Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

w. Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

x. Going concern basis

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

These financial statements have been prepared on a going concern basis which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business. As at 30 June 2019 the Group had net assets of $3,097,548 (2018: $5,186,204) and loss for the year of $2,352,622: (2018: loss $2,065,987) and had a net working capital deficit of $166,189 (2018: $1,941,618 surplus).

The ability of the Company to continue to pay its debts as and when they fall due is dependent on the Company successfully raising additional share capital and ultimately developing its mineral properties.

The directors believe it is appropriate to prepare these financial statements on a going concern basis because:

• The directors have appropriate plans to raise additional funds as and when required. In light of the Company’s current exploration projects, the directors believe that the additional capital can be raised in the market; and

• The directors have an appropriate plan to contain certain operating and exploration expenditure if required funding is not available.

These financial statements have been prepared on the basis that the Company can meet its commitments as and when they fall due and can therefore continue normal business activities, and the realisation of its assets and settlement of its liabilities can occur in the ordinary course of business.

In the event that the Group is unable to satisfy future funding requirements, a material uncertainty would arise that may cast significant doubt on the Group’s ability to continue as a going concern with the result that the Group may be required to realise its assets at amounts different from those currently recognised, settle liabilities other than in the ordinary course of business and make provisions for costs which may arise as a result of cessation or curtailment of normal business operations.

2. OTHER REVENUE Operating activities Interest received Exploration research and development refund 3. EXPENSES Profit / (losses) for the year are arrived at after charging the following expenses: Impairment of intangible asset Exploration expenses Fair value movements on financial assets Superannuation expenses Employee benefit expense (excluding superannuation)	2019 $ 1,438 227,652 229,090 216,414 1,560,341 1,550 2,603 12,134	2018 $ 2,378 -
		2,378
		205,952 1,160,952 1,000 3,861 9,033

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

4. INCOME TAX EXPENSE a. The components of tax expense comprise: Current tax Deferred tax b. The prima facie tax on profit/(loss) from ordinary activities before income tax is reconciled to the income tax as follows: Prima facie tax payable on profit/(loss) from ordinary activities before income tax at 27.5% (2018: 27.5%) Add: Tax effect of: — Other non-allowable items — Impairment expense — Capital losses realised — Foreign tax losses not recognised — Property, plant and equipment — Provisions and accruals — Exploration expenditure — Revenue losses not recognised Less: Tax effect of: Unrealised foreign exchange Exploration capitalised —Capital raising costs -R & D refund Income tax expense/(benefit) The applicable average weighted tax rates are as follows: c. The following deferred tax balances have not been recognised: Deferred Tax Assets at 27.5% (2018:27.5%): Carry forward revenue losses Foreign tax losses Impairment of investments Capital raising costs Capital losses Unrealised foreign exchange loss Provisions and accruals	2019 $ - - - (646,971) 426 59,514 - 172,619 - 2,745 429,094 577,842 1,242,240 503,399 29,265 62,604 595,268 - 0% 5,223,085 1,833,207 426 61,522 167,514 - 7,161 7,292,915	2018 $ - -
		-
		(568,146) - 56,912 - 320,212 896 2,451 - 709,752
		1,090,223
		- 486,085 35,991 -
		522,076
		- 0% 4,716,629 3,188,260 56,912 83,548 167,514 - 4,417
		8,217,280

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

The tax benefits of the above Deferred Tax Assets will only be obtained if:

The Company derives future assessable income of a nature and an amount sufficient to enable the benefits to be utilised; and

The Company continues to comply with the conditions for deductibility conditions imposed by the law; and

No change in income tax legislation adversely affects the Company in utilising the benefits.

Deferred tax liabilities at 27.5% (2018: 27.5%): Fair value of investments Exploration expenditure Property, plant and equipment Accrued income	2019 $ - 881,041 - 216 881,257	2018 $ 138 550,672 447 216
		551,473

The above Deferred Tax Liabilities have not been recognised as they have given rise to the carry forward revenue losses for which the Deferred Tax Assets have not been recognised.

5.

PROFIT/(LOSS) PER SHARE a. Profit/(loss) from continuing operations used in the calculation of basic and diluted EPS b. Weighted average number of ordinary shares outstanding during the year used in calculating the basic and dilutive EPS	2019 $ (2,352,622) 1,290,647,130	2018 $ (2,065,987)
		1,112,435,662

There are 145,000,000 share options excluded from the calculation of diluted earnings per share (that could potentially dilute basic earnings per share in the future) because they are anti-dilutive for each of the years presented.

6. CASH AND CASH EQUIVALENTS

7.

Cash at bank and in hand Short-term bank deposits Reconciliation of cash Cash at the end of the financial year as shown in the statement of cash flow is reconciled to items in the statement of financial position as follows: Cash and cash equivalents TRADE AND OTHER RECEIVABLES CURRENT GST receivable Interest receivable Other receivables	2019 $ 414,675 - 414,675 414,675 27,073 787 - 27,860	2018 $ 2,377,040 -
		2,377,040
		2,377,040
		78,476 443 787
		79,706

Refer to note 24 Financial Risk Management for further details.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

8.

OTHER ASSETS CURRENT Prepayments NON-CURRENT Environmental bonds Term deposit for credit card	2019 $ 47,978 47,978 24,000 35,000 59,000	2018 $ 25,718 25,718 24,000 35,000 59,000

The effective interest rate on the credit card term deposit was 2.40% (2018: 2.40%). This term deposit has a maturity of a year.

Refer to note 24 Financial Risk Management for further details.

9. FINANCIAL ASSETS

NON-CURRENT Financial assets Reconciliation Reconciliation of the fair values at the beginning and end of the current and previous financial year are set out below: Opening fair value Additions Disposals Revaluation increments/(decrements) Closing fair value	953 953 2,503 - - (1,550) 953	2,503
		2,503
		3,503 - - (1,000)
		2,503

Financial assets comprise of investments in the ordinary issued capital of various entities. There are no fixed returns or fixed maturity dates attached to these investments.

The Consolidated Entity’s exposure to credit, market and liquidity risk related to financial assets is disclosed in Note 24.

10. CONTROLLED ENTITIES

CONTROLLED ENTITIES
	Country of	Percentage
	Incorporation	Owned (%)*
		2019	2018
Subsidiaries of Corazon Mining Ltd:
Resource Investment Group Pty Ltd	Australia	100	100
Manitoba Nickel Pty Ltd	Australia	100	100
Manitoba Nickel Inc	Canada	100	100
Mt Gilmore Resources Pty Ltd	Australia	100	100

* Percentage of voting power is in proportion to ownership

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

11. INTANGIBLE ASSET

INTANGIBLE ASSET
Balance at the beginning of the year Option payments Impairment of intangible asset Balance at the end of the year	2019 $ - 216,414 (216,414)	2018 $ - 205,952 (205,952) -
	-

LYNN LAKE PROJECT

In July 2010, the Consolidated Entity has entered into an option agreement to acquire a 100% interest in the Lynn Lake Nickel Copper Project in Manitoba Canada, held by Manitoba Nickel Pty Ltd (Manitoba).

The only asset of the acquired subsidiary is an option to acquire an exploration tenement. The acquisition is in substance an acquisition of an option to a project. Accordingly, in the consolidated financial statements, such transaction is accounted for in accordance with AASB138, Intangible assets. The project was impairment tested and an individual impairment expense of $216,414 was recorded against the project.

The Consolidated Entity has spent approximately $13 million on exploration and evaluation at the Lynn Lake Project. On 9 August 2012, the Consolidated Entity renegotiated the terms of its option to acquire the Lynn Lake Project. The renegotiated option agreement extended the option period from 20 October 2012 to 20 October 2015 and acknowledges that the existing earn in obligation has been satisfied. On 29 July 2015, the Company further renegotiated the terms of its option to acquire 100% equity in project, securing significantly more favourable terms with regards to the future acquisition of the Lynn Lake Project. Under the terms of the original contract the Company was required to make a cash payment of CAD1,000,000 by 20 October 2015 to acquire the project, this has now been revised to halfyearly payments of $100,000 until the full amount of the CAD1,000,000 has been paid (final payment due on or before 20 April 2020). The other change of significance is that the deferred consideration of CAD750,000 is now payable on the ‘commencement of commercial mining’ refer to note 18 for details.

PLANT AND EQUIPMENT Plant and equipment: At cost Accumulated depreciation Office furniture and equipment At cost Accumulated depreciation Total Plant and Equipment	2019 $ - - - - - - -	2018 $ 153,003 (120,184)
		32,819
		2,713 (2,446)
		267
		33,086

12. PLANT AND EQUIPMENT

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

Reconciliation of the written down values at the beginning and end of the current and previous financial year are set out below:

Reconciliation Balance at 1 July 2017 Additions Depreciation expense Balance at 30 June 2018 Additions Depreciation expense Disposal of fixed assets Balance at 30 June 2019	Plant and Equipment Office Furniture and Equipment Total $ $ $ 18,403 326 18,729 19,241 - 19,241 (4,825) (59) (4,884)
	32,819 267 33,086
	(5,029) (24) (5,053) (27,790) (243) (28,033)
	- - -

EXPLORATION AND EVALUATION EXPENDITURE Exploration project expenditure Exploration earn-in expenditure Total exploration expenditure Movement in carrying value: Brought forward Exploration project expenditure Exploration earn-in expenditure Exploration tenement acquisition costs (a) Impairment of exploration expenditure At reporting date	2019 $ - 3,203,784 3,203,784 3,149,997 412,789 1,201,339 - (1,560,341) 3,203,784	2018 $ 1,147,552 2,002,445
		3,149,997
		1,299,566 1,243,800 1,517,583 250,000 (1,160,952)
		3,149,997

13. EXPLORATION AND EVALUATION EXPENDITURE

Victory Project

The Victory Project is located immediately adjacent to the Company’s Lynn Lake Project, and contains the main nickel resources in that area.

Mt Gilmore Project

The Mt Gilmore Project is an advanced, high-grade cobalt-copper-gold sulphide deposit, located 35km from the major centre of Grafton in north-eastern New South Wales.

On 2 July 2019 the Company issued 83,333,334 fully paid ordinary shares to Providence Gold and Minerals Pty Ltd with and aggregate valuation of $250,000 to acquire a further 29% in the Mt Gilmore Project. This recent acquisition increases the Company’s interest in the project from 51% to 80%.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

The value of the exploration expenditure is dependent upon:

• The continuance of the rights to tenure of the areas of interest;

• The results of future exploration; and

• The recoupment of costs through successful development and exploitation of the areas of interest or alternatively by their sale.

14. TRADE AND OTHER PAYABLES CURRENT Trade payables Sundry payables and accrued expenses	2019 $ 152,334 493,535 645,869	2018 $ 159,993 380,853
		540,846

Refer to note 24 Financial Risk Management for further details.

15. PROVISIONS

16.	Employee benefits Annual leave Opening balance at 1 July 2018 Increase of provision Balance at 30 June 2019 ISSUED CAPITAL 1,380,688,667 (2018: 1,265,283,317) fully paid ordinary shares Less: Capital raising costs a. Ordinary shares At the beginning of reporting year Shares issued during the year — Placements (i) — Consideration for acquisition of projects At reporting date At the beginning of reporting year Shares issued during the year - Placements (i) - Consideration for acquisition of projects Less: capital raising costs At reporting date a)		10,833 10,833 2019 $ 40,645,569 (2,490,662) 38,154,907 2019 No. 1,265,283,317 115,405,350 - 1,380,688,667 2019 $ 37,890,941 346,216 - (82,250) 38,154,907	-
				-
				- 10,833 10,833 2018 $ 40,299,354 (2,408,413)
				37,890,941
				2018 No. 899,426,652 353,356,665 12,500,000
				1,265,283,317
				2018 $ 32,772,510 5,172,993 150,000 (204,562)
				37,890,941

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

b) Ordinary shares

(i) Placements

On 11 April 2019 the Company announced the placement of 115,405,350 fully paid ordinary shares with sophisticated professional investors. The shares were valued at $0.003 per share and raised $346,216 for Company exploration programs and working capital purposes.

Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. These fully paid ordinary have no par value.

At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

c) Options

There were no share option issues during the financial year.

For information relating to the Corazon Mining Limited employee option plan, including details of options issued, exercised and lapsed during the financial year and the options outstanding at yearend, refer to Note 20 Share-based Payments.

d) Capital Management

The Directors’ primary objective is to maintain a capital structure that ensures the lowest cost of capital to the Group. At reporting date the Group has no external borrowings. The Directors are confident that the Company will raise capital through the issue of additional shares when and as required. The Group is not subject to any externally imposed capital requirements.

17. RESERVES

2019 Reserves at beginning of financial year Employee share option plan issue Lapse of options on expiry Reserves at end of financial year 2018 Reserves at beginning of financial year Employee share option plan issue Lapse of options on expiry Reserves at end of financial year	Share based payment reserve $ 994,400 - - 994,400 Share based payment reserve $ 994,400 - - 994,400	Contingent reserve $ 303,750 - - 303,750 Contingent reserve $ 303,750 - - 303,750	Total 1,298,150 - -
			1,298,150
			Total 1,298,150 - -
			1,298,150

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

The share based payment reserve records items recognised as expenses on valuation of employee share and consultants’ options.

The contingent reserve is used to record the contingent consideration that relates to the issue of a further 4,500,000 shares in Corazon on the completion of acquisition of the title to the Lynn Lake Project in accordance with the terms of the Lynn Lake option agreement

18. CAPITAL COMMITMENTS

In order to maintain current rights of tenure to exploration tenements the Company is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various Governments. These obligations can be reduced by selective relinquishment of exploration tenure or renegotiation.

VICTORY PROJECT

On 1 April 2015, the acquisition of the Victory Project from Victory Nickel Inc. (“the Vendor”) was finalised. The Victory Project is located immediately adjacent to the Company’s Lynn Lake Project, and contains the main nickel resources in that area.

The terms of the acquisition include a requirement to spend an aggregate amount of AUD$3.5 million on exploration and resource development in a five year period (concluding on the 19 December 2019). The group continues to progress towards meeting the expenditure requirement. In the event that the Company fails to meet this expenditure requirement:

• The difference between AUD$3.5 million expenditure requirement and what is actually spent, must be paid to the Vendor in cash or shares; or

• The project is returned to Vendor.

LYNN LAKE PROJECT

On 13 July 2010, the Company acquired a subsidiary entity Manitoba Nickel Pty Ltd holder of an option to acquire a 100% interest in the Lynn Lake Project for approximately CAD$1.75 million in expenditure over four years.

On 29 July 2015, the Company renegotiated the terms of its option to acquire 100% equity in project, securing more favourable terms with regards to the future acquisition of the Lynn Lake Project. Under the terms of the original contract the Company was required to make a cash payment of CAD1,000,000 by 20 October 2015 to acquire the project, this has now been revised to half-yearly payments of CAD100,000 until the full amount of the CAD1,000,000 has been paid (final payment due on or before 20 April 2020). The other change of significance is that the deferred consideration of CAD750,000 is now payable on the ‘commencement of commercial mining’ as opposed to the original agreement of being payable on the earliest of either :

• Defining a JORC compliant resource greater than 30,000 tonnes of nickel metal;

• Completion of a positive feasibility study: or

• The commencement of commercial mining.

As at 30 June 2019, the Company has spent approximately $13 million on exploration and evaluation at the Lynn Lake Project. The renegotiated option agreement acknowledges that the existing earn in obligation has been satisfied. The Company has the discretion to exercise the option to acquire Lynn Lake project on or before 20 April 2020 by paying the balance of the half yearly payments.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

Subject to Manitoba Co. subsequently completing the acquisition of title to the Lynn Lake Project in accordance with the terms of the Lynn Lake Project Option Agreement, the Company will allot and issue to the original shareholders of Manitoba Nickel a further 4,500,000 Shares.

MT GILMORE PROJECT

On 16 June 2016 the Company announced that it had executed an earn-in agreement for exclusive rights to acquire up to 80% of the Mt Gilmore Cobalt-Copper-Gold Project in New South Wales, Australia from private company Providence Gold and Minerals Pty Ltd “the Vendor”.

On 2 July 2019 the Company concluded this agreement with the Company fulfilling its final contractual commitment being the issued of 83,333,334 fully paid ordinary shares to Providence Gold and Minerals Pty Ltd (the “vendor”), to finalise the acquisition of the remaining 29% interest. This increases the Company overall interest in the project to 80%. The earn-in component of this agreement was fulfilled during the 2017 financial year.

The Company has no further contractual financial commitment to the Project other than to maintain the project in good standing. The Company continues to sole fund the project and the Vendor has a free carry period on the project through to the decision to mine.

19. OPERATING SEGMENTS

Identification of reportable segments

The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed and used by the chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

Operating segments are identified by Management based on the mineral resource and exploration activities in Australia and Canada. Discrete financial information about each project is reported to the chief operating decision maker on a regular basis.

The reportable segments are based on aggregated operating segments determined by the similarity of the economic characteristics, the nature of the activities and the regulatory environment in which those segments operate.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

The Consolidated Entity has two reportable segments based on the geographical areas of the mineral resource and exploration activities in Australia and Canada. Unallocated results, assets and liabilities represent corporate amounts that are not core to the reportable segments.

Canada Australia $ $ 30 June 2019 Revenue - 227,652 Total segment revenue - 227,652 Segment net operating profit/(loss) after tax (1,786,638) 208,759 Depreciation (743) - Exploration expense (1,560,341) - Exploration R&D grant 227,652 Intangible asset impairment (216,414) - Realised loss on disposal of fixed assets (9,140) (18,893) Segment assets - 3,227,784 Segment liabilities (65,252) (286,117) Canada Australia $ $ 30 June 2018 Revenue - - Total segment revenue - - Segment net operating profit/(loss) after tax (1,368,642) - Exploration expense (1,160,952) - Depreciation (1,739) - Intangible asset impairment (205,952) - Segment assets 1,157,435 2,026,445 Segment liabilities (20,593) (107,302) Segment analysis by geographical region Canada Australia	Canada Australia $ $ - 227,652	Unallocated Total $ $ 1,438 229,090
	- 227,652	1,438 229,090
	(1,786,638) 208,759	(774,743) (2,352,622)
	(743) - (1,560,341) - 227,652 (216,414) - (9,140) (18,893) - 3,227,784	(4,310) (5,053) - 1,560,341 227,652 - (216,414) - (28,033) 526,466 3,754,250
	(65,252) (286,117)	(305,333) (656,702)
	Canada Australia $ $ - -	Unallocated Total $ $ 2,378 2,378
	- -	2,378 2,378
	(1,368,642) -	(697,345) (2,065,987)
	(1,160,952) - (1,739) - (205,952) - 1,157,435 2,026,445	- (1,160,952) (3,145) (4,884) - (205,952) 2,543,170 5,727,050
	(20,593) (107,302)	(412,951) (540,846)
		Non-current assets 2019 2018 - 1,157,435 3,263,737 2,087,151 3,263,737 3,244,586

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

20. SHARE BASED PAYMENTS

SHARE OPTIONS ISSUED

Options are issued to key management personnel as part of their compensation under the Company’s Employee Share Option Plan. The options issued may be subject to performance criteria and are issued to key management personnel of Corazon Mining Limited to increase goal congruence between key management personnel and shareholders.

Number and weighted average exercise prices of share options

The following table illustrates the number and weighted average exercise prices (WAEP) of and movements in share options issued under Share Based Payment Scheme during the year:

Issue toemployees and key personnel Outstanding at the beginning of the year Granted Exercised Expired Outstanding at year-end Exercisable at year-end Issue toconsultants Outstanding at the beginning of the year Granted Exercised Expired Outstanding at year-end Exercisable at year-end	2019 2018 Number of Options Weighted Average Exercise Price $ Number of Options Weighted Average Exercise Price $ 40,000,000 $0.035 40,000,000 $0.035 - - - - - - - - - - - -
	40,000,000 $0.035 40,000,000 $0.035
	40,000,000 $0.035 40,000,000 $0.035
	20,000,000 0.015 20,000,000 0.015 - - - - - - - - - - - -
	20,000,000 0.015 20,000,000 0.015
	20,000,000 0.015 20,000,000 0.015

No compensation options were exercised or forfeited during the year ended 30 June 2019.

The following share-based payment arrangements were in existence during the current and prior reporting periods:

Options	series	Number	Grant	Expiry	Exercise	Fair value at
			date	date	Price	grant date
					$	$
i)	Consultants	20,000,000	29/07/2016	29/07/2019	0.15	0.0079
ii)	Staff and key personnel	40,000,000	31/03/2017	31/03/2020	0.035	0.021

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

Inputs into the model	Series (i)	Series (ii)
Grant date share price	$0.009	$0.026
Exercise price	$0.015	$0.035
Expected volatility	95.77%	157%
Option life	3 years	3 years
Risk-free interest rate	1.48%	1.89%

The options outstanding at 30 June 2019 had a weighted average exercise price of $0.03 (2018: $0.03) and a weighted average remaining contractual life of 0.53 years (2018: 1.53 years). The options were valued using a Black and Scholes option pricing model.

ORDINARY SHARES ISSUED

There were no fully paid ordinary share-based payments issued during the financial year.

		2019	2018
		$	$
21.	CASH FLOW INFORMATION
	Reconciliation of Cash Flow from Operations with Net Profit/(Loss)
	Profit/(Loss) after income tax	(2,352,622)	(2,065,987)
	Non-cash flows in profit
	Depreciation	5,053	4,884
	Impairment of financial assets	1,550	1,000
	Impairment of intangible asset	216,414	205,952
	Realised loss on disposal of fixed assets	28,033	-
	Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries
	(Increase)/decrease in receivables and prepayments	29,585	(71,456)
	(Increase)/decrease in other assets	-	(4,000)
	(Increase)/decrease in exploration and evaluation
	expenditure	(53,788)	(1,700,431)
	Increase/(decrease) in trade and other payables	(10,674)	(91,316)
	Increase/(decrease) in provisions	10,833	-
	Cashflow from operations	(2,125,616)	(3,721,354)

Please refer to Note 20 Share based payments for information relating to non-cash investing and finance activities.

22. KEY MANAGEMENT PERSONNEL COMPENSATION

The names of Directors and officers in office at any time during the year are:

Clive Jones Non-Executive Chairman Brett Smith Executive Managing Director Jonathan Downes Non-Executive Director Mark Qiu Non-Executive Director Robert Orr Company Secretary

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

Key management personnel compensation

The key management personnel compensation comprised: Short term employment benefits Post-employment benefits Share based payments – short term employment benefits Share based payments – performance based remuneration	2019 $ 437,856 3,904 - - 441,760	2018 $ 432,173 3,861 - - 436,034

Key management personnel remuneration has been included in the Remuneration Report section of the Directors’ Report.

23. AUDITORS’ REMUNERATION During the financial year the following fees were paid or payable for services provided by PKF Perth, the auditor of the Group: Audit or review of financial statements Preparation of tax return Total remuneration	2019 $ 34,272 4,200 38,472	2018 $ 41,230 3,900
		45,130

24. FINANCIAL RISK MANAGEMENT

Financial Risk Management Policies

The Consolidated Entity’s financial instruments consist mainly of deposits with banks, local money market instruments, equity investments, accounts receivable and payable.

i. Capital Management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on capital, which the Consolidated Entity defines as net operating income divided by total shareholders’ equity.

ii. Treasury Risk Management

The Board of Directors meet on a regular basis to analyse financial risk exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts.

The Board’s overall risk management strategy seeks to assist the Consolidated Entity in meeting its financial targets, whilst minimising potential adverse effects on financial performance.

Risk management policies are approved and reviewed by the Board on a regular basis. These include the use of credit risk policies and future cash flow requirements.

iii.

Financial Risk Exposures and Management

The main risks the Consolidated Entity is exposed to through its financial instruments are liquidity risk, market risk, credit risk and price risk.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

(a)

Liquidity risk

Liquidity risk is the risk that the Consolidated Entity will not be able to meet its financial obligations as they fall due. The Consolidated Entity’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Consolidated Entity’s reputation.

The Consolidated Entity currently does not have major funding in place. However, the Consolidated Entity continuously monitors forecasts and actual cash flows and the maturity profiles of financial assets and liabilities to manage its liquidity risk. Surplus funds are generally only invested in short term bank deposits.

Typically the Consolidated Entity ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 90 days; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. The Directors are confident that the Company will raise capital through the issue of additional shares when and as required.

The decision on how the Consolidated Entity will raise future capital will depend on market conditions existing at that time.

(b) Market Risk

Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the Consolidated Entity’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(c) Credit risk

Credit risk arises from the financial assets of the Consolidated Entity, which comprise cash and cash equivalents, other receivables and financial assets. Receivable balances are monitored on an on-going basis with the result that the Consolidated Entity’s exposure to bad debts is not significant. The Consolidated Entity has adopted the policy of only dealing with credit worthy counterparties.

The Group's exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments.

The Consolidated Entity does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the Consolidated Entity.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

(d) Equity Price risk

The Group is exposed to equity securities price risk from investments held that are classified on the statement of financial position as financial assets. Material investments are managed on an individual basis and all buy and sell decisions are approved by the Board.

The Consolidated Entity holds the following financial instruments:

Financial Assets: Cash and cash equivalents Receivables Other assets Investments Total Financial Assets Financial Liabilities: Trade and sundry payables Total Financial Liabilities Trade and sundry payables are expected to be paid as followed: Less than 1 month Greater than 1 year	2019 $ 414,675 27,860 59,000 953 502,488 645,869 645,869 645,869 - 645,869	2018 $ 2,377,040 79,706 59,000 2,503
		2,518,249
		540,846
		540,846
		540,846 -
		540,846

iv. Fair value of financial instruments

The following tables details the Group’s fair values of financial instruments categorized by the following level:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities

• Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices)

• Level 3: Inputs for asset or liability that are not based on observable market data (Unobservable inputs)

2019 Assets Ordinary shares Total assets 2018 Assets Ordinary shares Total assets	Level 1 $ 953 953 Level 1 $ 2,503 2,503	Level 2 $ - - Level 2 $ - -	Level 3 $ - - Level 3 $ - -	Total $ 953
				953
				Total $ 2,503
				2,503

There were no transfers between levels during the financial year.

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

v. Fair value of receivables

The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their short-term nature.

vi. Sensitivity Analysis

Interest Rate Risk and Price Risk

The Group has performed sensitivity analysis relating to its exposure to interest rate risk and price risk at reporting date. This sensitivity analysis demonstrates the effect on the current year results and equity, which could result from a change in these risks.

Interest Rate Sensitivity Analysis

Monetary items exposed to interest rate fluctuations at reporting date Cash and cash equivalents Other assets	2019 $ 414,675 59,000 473,675	2018 $ 2,377,040 59,000
		2,436,040

The effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:

emaining constant would be as follows:
Change in loss
Increase in interest rate by 1% (100 basis points)	3,434	17,661
Decrease in interest rate by 1% (100 basis points)	(3,434)	(17,661)
Change in equity
Increase in interest rate by 1% (100 basis points)	3,434	17,661
Decrease in interest rate by 1% (100 basis points)	(3,434)	(17,661)

Price Risk Sensitivity Analysis

The majority of the Group’s investments are publicly traded and are included in the ASX. The table below summarises the impact of increases/decreases of this index on the Group’s post tax profit for the year and on equity. The analysis is based on the assumption that equity indexes had increased/decreased by 10% (2018: 10%) with all other variables held constant and all the Group’s equity instruments moved according to the historical correlation with the index.

Change in profit
Increase in All Ordinaries Index by 10%	69	181
Decrease in All Ordinaries Index by 10%	(69)	(181)
Change in equity
Increase in All Ordinaries Index 10%	69	181
Decrease in All Ordinaries Index by 10%	(69)	(181)

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

25. RELATED PARTY DISCLOSURES

• i. The ultimate parent entity in the Group is Corazon Mining Limited.

• ii. No amounts in addition to those disclosed in the Remuneration Report in the Directors’ Report were paid or payable to Directors of the Company at the end of the year.

• iii. There were no loans to key management personnel at the end of the year.

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Related entity receivables/payables

Payables

The Company is charged by a related party for shared office and salary expenses. Ironbark Zinc Limited is considered related due to Jonathan Downes directorship in the entity.

Ironbark Zinc Limited (“Ironbark”)

The total charged for the financial year ended 30 June 2019 was $28,774 (2018: $33,274). At reporting date the balance for outstanding payables owed to Ironbark was nil (2018: $2,549).

26. CONTINGENT ASSETS AND LIABILITIES

The Consolidated Entity is unaware of any contingent assets or liabilities that may have a material impact on the Company’s financial position.

27. EVENTS AFTER THE REPORTING DATE

On 2 July 2019 the Company issued 83,333,334 fully paid ordinary shares at an issue price of $0.003 to Providence Gold and Minerals Pty Ltd to acquire a further 29% in the Mt Gilmore Project. This recent acquisition increases the Company’s interest in the project from 51% to 80%.

On 10 July 2019 the Company issued the following allotments of securities:

1. 166,666,622 fully paid ordinary shares with an issue price of $0.003, raising $500,000 for Company exploration programs and working capital purposes as per the Company Share Purchase Plan (SPP);

2. 188,047,956 listed options exercisable at $0.007 each on or before 10 July 2022, these options were free attaching to fully paid ordinary shares issued as per this SPP (76,936,895 listed options attributable), and also the April 2019 capital raising (111,111,061 listed options).

On 30 July 2019 the Company announced a lapse of 20,000,000 unlisted options exercisable at $0.015.

On 23 August 2019 the Company announced a lapse of 85,000,000 unlisted options exercisable at $0.03.

On 18 September 2019, Corazon announced that Mr Terry Streeter has joined the board as nonexecutive Chairman, to help drive and an accelerated exploration and development program at the Lynn Lake project. Mr Clive Jones stepped down as non-executive Chairman and will retain the role as nonexecutive Director.

On 18 September 2019, Corazon announced it has received firm commitments totalling approximately $1,000,000 through a Placement of approximately 417.6 million Ordinary shares in Corazon at an issue price of $0.0025 per share

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity in future financial years.

28. DIVIDENDS

There were no dividends paid or declared during the financial year.

29. SIGNIFICANT NON CASH TRANSACTIONS

There were no significant non-cash transactions during the financial year.

PARENT ENTITY DISCLOSURES Financial position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Net assets Equity Issued capital Option reserves Contingent reserves Accumulated losses Total equity Financial performance Profit/(loss) for the year Other comprehensive income/(loss) Total comprehensive income/(loss)	2019 $ 438,959 3,315,289 3,754,248 656,702 - 656,702 3,097,546 38,154,907 994,400 303,750 (36,355,511) 3,097,546 (2,752,955) - (2,752,955)	2018 $ 2,433,490 3,693,891
		6,127,381
		540,846 -
		540,846
		5,586,535
		37,890,941 994,400 303,750 (33,602,556)
		5,586,535
		(2,715,986) -
		(2,715,986)

30. PARENT ENTITY DISCLOSURES

Commitments

The commitments of the Parent Entity are consistent with that of the Consolidated Entity (refer to note 18).

Contingent assets, contingent liabilities and guarantees

The contingent assets, contingent liabilities and guarantees of the Parent Entity are consistent with that of the Consolidated Entity (refer to note 26).

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NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (cont)

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except for the following: Investment in subsidiaries are accounted for at cost, less any impairment in the parent entity

31. COMPANY DETAILS

The registered office and principal place of business of the Company is:

Level 2, 38 Richardson Street West Perth WA 6005 Australia

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DIRECTORS’ DECLARATION

The Directors of the Company declare that:

1. The financial statements, notes and additional disclosures included in the Directors’ Report and designated as audited, are in accordance with the Corporations Act 2001 and:

2. a. comply with Accounting Standards (including Australian Accounting Interpretations) and the Corporations Regulations 2001;

3. b. give a true and fair view of the financial position as at 30 June 2019 and of the performance for the year ended on that date of the Company and Consolidated Group; and

4. c. the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

5. The Chief Executive Officer and Chief Finance Officer have each declared that:

6. a. the financial records of the Company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;

7. b. the financial statements and notes for the financial year comply with the Accounting Standards;

8. c. the financial statements and notes for the financial year give a true and fair view; and

9. d. any other matters that are prescribed by regulations for the purposes of Section 295A(2) in relation to the financial statements and notes for the financial year are satisfied.

10. In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

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______ Brett Smith Executive Managing Director

Dated this 20[th] day of September 2019

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INDEPENDENT AUDITOR’S REPORT

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TO THE MEMBERS OF

CORAZON MINING LIMITED

Report on the Financial Report

Opinion

We have audited the accompanying financial report of Corazon Mining Limited (the company), which comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the company and the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

In our opinion, the financial report of Corazon Mining Limited is in accordance with the Corporations Act 2001, including:

• i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2019 and of its performance for the year ended on that date; and

• ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. Our responsibilities under those standards are further described in the Auditor’s Responsibility section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty related to going concern

Without modifying our opinion, we draw attention to Note 1(x) in the financial report, which indicated that the consolidated entity incurred a net loss after tax of $2,352,622 during the year ended 30 June 2019 (2018: loss of $2,065,987). The consolidated entity will be reliant on future capital raisings to continue as a going concern. This, along with other matters as set forth in Note 1(x), indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

The financial report of the consolidated entity does not include any adjustments in relation to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern.

Level 4, 35 Havelock Street, West Perth, WA 6005 PO Box 609, West Perth, WA 6872

T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au

PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

Liability limited by a scheme approved under Professional Standards Legislation.

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Independence

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We are independent of the consolidated entity in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Key Audit Matter

A key audit matter is a matter that, in our professional judgement, was of most significance in our audit of the financial report of the current year. This matter was addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter. For each matter below, our description of how our audit addressed the matter is provided in that context.

1. Carrying value of capitalised exploration expenditure

Why significant

How our audit addressed the key audit matter

As at 30 June 2019 the carrying value of exploration and evaluation assets was $3,203,784 (2018: $3,149,997), as disclosed in Note 13. This represents 85% of the total assets of the consolidated entity.

The consolidated entity’s accounting policy in respect of exploration and evaluation expenditure is outlined in Note 1a (ii) and 1c. Significant judgement is required:

• in determining whether facts and circumstances indicate that the exploration and evaluation assets should be tested for impairment in accordance with Australian Accounting Standard AASB 6 Exploration for and Evaluation of Mineral Resources (“AASB 6”); and

• in determining the treatment of exploration and evaluation expenditure in accordance with AASB 6, and the consolidated entity’s accounting policy. In particular:

• whether the particular areas of interest meet the recognition conditions for an asset; and

• which elements of exploration and evaluation expenditures qualify for capitalisation for each area of interest.

Our work included, but was not limited to, the following procedures:

• Conducting a detailed review of management’s assessment of impairment trigger events prepared in accordance with AASB 6 including:

• assessing whether the rights to tenure of the areas of interest remained current at reporting date as well as confirming that rights to tenure are expected to be renewed for tenements that will expire in the near future;

• holding discussions with the directors and management as to the status of ongoing exploration programmes for the areas of interest, as well as assessing if there was evidence that a decision had been made to discontinue activities in any specific areas of interest; and

• obtaining and assessing evidence of the consolidated entity’s future intention for the areas of interest, including reviewing future budgeted expenditure and related work programmes;

• considering whether exploration activities for the areas of interest had reached a stage where a reasonable assessment of economically recoverable reserves existed;

• testing, on a sample basis, exploration and evaluation expenditure incurred during the year for compliance with AASB 6 and the consolidated entity’s accounting policy; and

• assessing the appropriateness of the related disclosures in Notes 1a (ii), 1c and 13.

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Other Information

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Other information is financial and non-financial information in the annual report of the consolidated entity which is provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible for Other Information in the annual report.

The Other Information we obtained prior to the date of this Auditor’s Report was the Chairman’s Letter, Director’s Report and Additional Information for Listed Public Companies. The remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.

Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report.

In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We are required to report if we conclude that there is a material misstatement of this Other Information in the Financial Report and based on the work we have performed on the Other Information that we obtained prior the date of this Auditor’s Report we have nothing to report.

Directors’ Responsibilities for the Financial Report

The Directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report complies with International Financial Reporting Standards.

In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using a going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report

Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report.

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The procedures selected depend on the auditor’s judgement, including assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.

We conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the consolidated entity to cease to continue as a going concern.

We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the consolidated entity to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on the Remuneration Report

Opinion

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2019.

In our opinion, the Remuneration Report of Corazon Mining Limited for the year ended 30 June 2019, complies with section 300A of the Corporations Act 2001.

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Responsibilities

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The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

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PKF PERTH

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SHANE CROSS PARTNER

20 SEPTEMBER 2019 WEST PERTH, WESTERN AUSTRALIA

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ADDITIONAL INFORMATION FOR LISTED COMPANIES

The following additional information is required by the Australian Securities Exchange Ltd in respect of listed public companies only.

Ordinary share capital

1,630,688,623 fully paid shares are held by 2,356 individual shareholders. There were no shareholdings held in less than marketable parcels.

Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.

Options

188,047,956 Listed options are held by 101 individual option holders Option exercisable at $0.007, expiring at 10/07/2022

40,000,000 unquoted options are held by 9 individual option holders. Options do not carrying a right to vote.

Distribution of holders of equity securities Category (size of holding) 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over	Number Fully paid ordinary shares Options 115 111 82 906 1,142 110
	2,356 110

20 Largest Shareholders — Ordinary Shares	20 Largest Shareholders — Ordinary Shares	Number of	% Held of
A record of the 20 largest shareholders as at 11 September 2019 is as follows:-		Ordinary	Issued
		Fully Paid	Ordinary
Ordinary shareholders		Shares Held	Capital
1	HANKING AUSTRALIA INVESTMENT PTY LTD	120,000,000	7.36
2	CRESCENT NOMINEES LIMITED	105,820,140	6.49
3	HANKING AUSTRALIA INVESTMENT PTY LTD	42,700,000	2.62
4	PROVIDENCE GOLD & MINERALS PTY LTD	36,977,777	2.27
5	MR MALCOLM JOHN MCCLURE	36,484,708	2.24
6	MR BENJAMIN LEIGH HARPER	35,768,230	2.19
7	PEAK HILL HOLDINGS PTY LTD	27,777,778	1.7
8	CITICORP NOMINEES PTY LIMITED	22,557,729	1.38
9	BNP PARIBAS NOMINEES PTY LTD DRP>	22,367,283	1.37
10	MR BIN LIU	21,000,000	1.29
11	MR BRANDON HA	19,200,000	1.18
12	MR XINHUI GONG	18,030,499	1.11
13	ZENIX NOMINEES PTY LTD	16,666,670	1.02
14	VERSOWORKS PTY LTD	16,000,000	0.98
15	MR POH SENG TAN	15,000,000	0.92
16	TATTERSFIELD SECURITIES LIMITED	13,200,000	0.81
17	MR DUNG PHAM	11,500,000	0.71
18	KIJENIA PTY LTD	10,835,909	0.66
19	EVENING PTY LTD	10,248,333	0.63
20	MR ALAN GOUGH + MRS KERRY GOUGH A/C>	10,000,000	0.61

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ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES (CONT.)

20 Largest Options holders —

Unquoted equity security holdings greater than 20% as at 11 September 2019 is as follows:-

			% Held of
		Number of	Options in an
		Options Held	unquoted
			class
Option exercisable at $0.035, expiring at 31/03/2020
1.	Brett Smith	10,000,000	25%
20 Largest Optionholders — Listed options		Number of	% Held of
Option exercisable at $0.007, expiring at 10/07/2022		Listed	Listed
A record of the 20 largest shareholders as at 11 September 2019 is as follows:-		Options	Options
Option holders
1	FIRST INVESTMENT PARTNERS PTY LTD	20,000,000	10.64
2	HANKING AUSTRALIA INVESTMENT PTY LTD	11,133,333	5.92
3	ZENIX NOMINEES PTY LTD	11,111,113	5.91
4	MR BIN LIU	7,845,977	4.17
5	BARCLAY WELLS LTD	5,556,000	2.95
6	ZERO NOMINEES PTY LTD	5,556,000	2.95
	MR SAMUEL GERSHON JACOBS + MRS SARITA DEVI JACOBS +
7	MISS MANEKHA BRIDGETTE JACOBS <THE PHOENIX SUPERFUND	5,000,000	2.66
	A/C>
8	M & K KORKIDAS PTY LTD	4,833,333	2.57
9	SJ CAPITAL PTY LTD	4,777,777	2.54
10	PUBMATE AUSTRALIA PTY LTD	4,466,666	2.38
11	ICON HOLDINGS PTY LTD	4,444,466	2.36
12	CRONEN PTY LTD	3,333,333	1.77
13	LAWRENCE CROWE CONSULTING PTY LTD A/C>	3,333,333	1.77
14	VOLGA PTY LTD	3,333,333	1.77
15	CRLJENKOVIC SUPER FUND PTY LTD A/C>	3,333,333	1.77
16	MR BRANDON HA	3,333,333	1.77
17	MR VIJAY REDDY SAMA	3,333,333	1.77
18	FUNGSVALE PTY LTD	3,333,333	1.77
19	MR DANIEL AARON HYLTON TUCKETT	2,940,000	1.56
20	CITICORP NOMINEES PTY LIMITED	2,666,666	1.42

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ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES (CONT.)

Schedule of Interests in Mining Tenements

Project	Mining tenements held	Location of tenements	Beneficial % interest at the end of the year	Change in the year
	LYNN LAKE PROJECT
LYNN LAKE	P7700E	Canada	100%1
LYNN LAKE	P7698E	Canada	100%1
LYNN LAKE	P8370E	Canada	100%1
LYNN LAKE	P7699E	Canada	100%1
LYNN LAKE	P7702E	Canada	100%1
LYNN LAKE	P3163F	Canada	100%1
LYNN LAKE	P3164F	Canada	100%1
LYNN LAKE	P3165F	Canada	100%1
LYNN LAKE	P2291F	Canada	100%1
LYNN LAKE	P3534F	Canada	100%1
LYNN LAKE	MB2482	Canada	100%1
LYNN LAKE	MB3566	Canada	100%1
LYNN LAKE	MB3567	Canada	100%1
LYNN LAKE	P1045F	Canada	100%1
LYNN LAKE	MB3580	Canada	100%1
LYNN LAKE	MB3581	Canada	100%1
LYNN LAKE	MB7346	Canada	100%1
LYNN LAKE	MB7349	Canada	100%1
LYNN LAKE	MB7350	Canada	100%1
LYNN LAKE	MB7025	Canada	100%1
LYNN LAKE	MB7361	Canada	100%1
LYNN LAKE	MB7362	Canada	100%1
LYNN LAKE	MB6364	Canada	100%1
LYNN LAKE	MB5175	Canada	100%1
LYNN LAKE	MB5701	Canada	100%1
LYNN LAKE	MB8734	Canada	100%1
LYNN LAKE	MB8735	Canada	100%1
LYNN LAKE	MB9218	Canada	100%1
LYNN LAKE	MB5399	Canada	100%1
LYNN LAKE	MB6360	Canada	100%1
LYNN LAKE	MB6361	Canada	100%1
LYNN LAKE	MB6362	Canada	100%1
LYNN LAKE	MB6363	Canada	100%1
LYNN LAKE	MB9453	Canada	100%1
LYNN LAKE	MB5672	Canada	100%1
LYNN LAKE	MB5669	Canada	100%1
LYNN LAKE	MB10070	Canada	100%1
LYNN LAKE	MB10071	Canada	100%1
LYNN LAKE	MB10085	Canada	100%1
LYNN LAKE	MB10086	Canada	100%1
LYNN LAKE	MB10382	Canada	100%1

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ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES (CONT.)

LYNN LAKE	MB10383	Canada	100%1
LYNN LAKE	MB10384	Canada	100%1
LYNN LAKE	MB10387	Canada	100%1
LYNN LAKE	MB10388	Canada	100%1
	BARRINGTON LAKE PROJECT
BARRINGTON LAKE	MB9634 Canada VICTORY PROJECT		100%1
VICTORY PROJECT	MB11328	Canada	100%2	100%2
VICTORY PROJECT	MB11388	Canada	100%2	100%2
VICTORY PROJECT	MB11389	Canada	100%2	100%2
VICTORY PROJECT	MB11390	Canada	100%2	100%2
VICTORY PROJECT	M2228	Canada	100%2	100%2
VICTORY PROJECT	M2229	Canada	100%2	100%2
VICTORY PROJECT	M2230	Canada	100%2	100%2
VICTORY PROJECT	M2232	Canada	100%2	100%2
VICTORY PROJECT	M2233	Canada	100%2	100%2
VICTORY PROJECT	M2234	Canada	100%2	100%2
VICTORY PROJECT	M2248	Canada	100%2	100%2
VICTORY PROJECT	M2249	Canada	100%2	100%2
VICTORY PROJECT	M2251	Canada	100%2	100%2
VICTORY PROJECT	M2252	Canada	100%2	100%2
VICTORY PROJECT	M2253	Canada	100%2	100%2
VICTORY PROJECT	M2254	Canada	100%2	100%2
VICTORY PROJECT	M2255	Canada	100%2	100%2
VICTORY PROJECT	M2256	Canada	100%2	100%2
VICTORY PROJECT	ML77	Canada	100%2	100%2
VICTORY PROJECT	ML90	Canada	100%2	100%2
	MT GILMORE PROJECT
MT GILMORE	EL 8379	New South Wales	51%	51%

NOTES:

1. Option to acquire up to 100% of Lynn Lake and Barrington Lake Projects; for terms of the agreement, refer to ASX announcement dated 09/08/12.

2. Acquired up to 100% of the Victory Project; for terms of the agreement, refer to ASX announcement dated 01/04/15.

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ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES (CONT.)

Resource Statement

Corazon released a JORC 2012 compliant Resource Estimate (“Resource”) for the Lynn Lake Nickel-Copper Project (“Project”) on 16 April 2015. This estimation combines and upgrades resources previously reported in both JORC 2004 and NI43-101 (Canadian) reporting standards, as well as incorporating some new areas of mineralisation defined by the previous mining operation. There has been no variation to this resource since its publication

Perth based independent mining consultants Ravensgate have defined an Indicated and Inferred Resource of 9.4Mt @ 0.88% nickel and 0.40% copper, for 83,000 tonnes of contained nickel and 37,800 tonnes of contained copper (refer below for a break-down of the Resource).

The Resource incorporates the EL, N, O and G nickel-copper sulphide deposits and is the first time a combined resource for the Lynn Lake project area has been defined in-line with Australian reporting standards.

The Resource grade is consistent with the historical grades from the Lynn Lake Mine, which operated for 24 years as a large tonnage-low cost mine, before its closure in 1976.

In defining this Resource, Corazon has utilised higher cut-off nickel grades for reporting the Project’s Resource than those previously published by past Canadian operators. This is in-line with the Company’s focus on determining exploitable resources rather than seeking to identify the total metal content within the project area.

Mineral Resource for the EL, N, O and G deposits at Lynn Lake

Deposit	Lower Cut-off Grade	Lower Cut-off Grade	Tonnes	Grade	Grade	Contained Metal	Contained Metal
	NIEQ %	Ni %		Ni %	Cu %	Ni Tonnes	Cu Tonnes
Indicated Resource Category
EL Upper		0.4	1,120,000	0.77	0.34	8,600	3,800
EL Lower		0.6	676,000	0.83	0.40	5,600	2,700
N	0.8		2,990,000	0.86	0.41	25,700	12,300
O	0.8		2,630,000	0.82	0.37	21,600	9,700
Indicated Sub-Total			7,420,000	0.83	0.38	61,500	28,500
Inferred Resource Category
EL Upper		0.4	645,000	1.55	0.61	10,000	3,900
EL Lower		0.6	292,000	1.01	0.44	3,000	1,300
N	0.8		710,000	0.79	0.39	5,600	2,800
O	0.8		100,000	0.75	0.36	750	360
G	0.8		240,000	0.94	0.39	2,300	940
Inferred Sub-Total			1,990,000	1.09	0.47	21,600	9,300
Total			9,400,000	0.88	0.40	83,000	37,800

Notes:

Nickel equivalent grades (NIEQ%) are provided as an indicator of value in a multi-metallic deposit. Lynn Lake has a long history as a nickel, copper and cobalt mining camp. It is the Company’s opinion that all elements included in the metal equivalent calculation have a reasonable potential to be recovered. Past mining of these deposits on average produced a nickel concentrate, consisting of 14% nickel, 1.5% copper and 0.35% cobalt and a copper concentrate having 30% copper and 0.60% nickel. In this circuit, 85% of the nickel, 93% of the copper and 80% of the cobalt were recovered on average. .

NIEQ% = (((Cu%222.04622)+(Ni%7.2222.04622))/7.22)/22.04622 based on metal prices of Ni = US$7.22 /lb Cu = US$2.00 /lb.

A review of factors was conducted which may affect the Resource Statement. These examined included;

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ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES (CONT.)

• Sovereign risk

• Commodity prices

• Processing or metallurgical understanding

• Environmental or mineability setting

• Standing of consultants/contractors/technology used in estimation process.

• Any new information or data that materially affects the information included in this report

Summary of governance and controls: The mineral resource for the Lynn Lake Project is reported in accordance with the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. This resource was published by Corazon Mining Limited in an announcement to the Australian Securities Exchange dated 16th April 2015. In accordance with requirements determined by the Australian Securities Exchange and the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”, a checklist for Assessment and Reporting Criteria is presented in that announcement.

The Company is not aware of any new information or data that materially affects the information included in this report, and the Company confirms that, to the best of its knowledge, all material assumptions and technical parameters underpinning the resource estimates in this report continue to apply and have not materially changed.

Disclosure Statements

Competent Persons Statement : The information in this report that relates to Exploration Results and Mineral Resources for the A Plug deposits at the Lynn Lake project is based on information compiled by Mr. Neal Leggo who is a Member of the Australian Institute of Geoscientists. Mr. Leggo at the time of completing this work, was a full time employee of Ravensgate and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Leggo consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

The information in this report that relates to Exploration Results and Mineral Resources for the EL Plug deposits at the Lynn Lake project is based on information compiled by Mr. Stephen Hyland who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr. Hyland, at the time of completing this work, was a full time employee of Ravensgate and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Hyland consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

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ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES (CONT.)

Company secretary

Mr. Robert Orr

Principal registered office

Level 2 38 Richardson Street West Perth WA 6005 Telephone +61 (0) 8 6142 6366

Share registry

Advanced Share Registry Services 2/150 Stirling Highway NEDLANDS WA 6009 Telephone +61 (0) 8 9389 8033

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CORPORATE GOVERNANCE

Corazon Mining Limited and its controlled entities (“the Consolidated Entity”) are committed to high standards of corporate governance. Policies and procedures which follow the “Principles of Good Corporate Governance and Best Practice Recommendations” 3[rd] Edition issued by the Australian Securities Exchange (“ASX”) Corporate Governance Council, to the extent they are applicable to the Consolidated Entity, have been adopted. The Companies corporate governance policies and procedures are disclosed on the Company web site at: http://corazon.com.au/corporate-governance/

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